Raja runs mini bus service in the town and has two vehicles. He furnishes you the following

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Raja runs mini bus service in the town and has two vehicles. He furnishes you the following data and wants you to compute the cost per running mile.

Vehicle A Rs Vehicle B Rs Cost of vehicle 25,000 15,000 Road licence (per year) 750 750 Salaries (yearly) 1,800 1,200 Driver’s wage per hour 4 4 Cost of fuel per litre 1.50 1.50 Maintenance per mile 1.50 2.00 Tyre cost per mile 1.00 .80 Garage rent per year 1,600 550 Annual insurance premium 850 500 Miles run per litre 6 5 Miles run during the year 15,000 6,000 Estimated life of vehicles 1,00,000 miles 75,000 miles Charge interest at 10% p.a. on the cost of vehicle. The vehicle runs 20 miles per hour on an average.

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