is at a distance of 10 kms and B is at a distance of 15 kms from the railway plots. A fleet of lorries of 5-tonne carrying capacity is used for transport of ore from mines. Records reveal that lorries aver- age a speed of 30 kms per hour when running and regularly take 10 minutes to unload at the railhead. At mine A, loading time averages 30 minutes per load while at mine B, loading time averages 20 minutes per load. Drivers wages, depreciation, insurance, and taxes are found to cost 390 per hour of operating Fuel, oil , tyres, repairs and maintenance cost 312 per km. Draw up a statement showing the per tonne-km cost of carrying iron ore from each mine. 10 20 40 30 10 30 30 60 20 10 Operating cost Statement determining Cost per tonne- km of carrying iron ore from two mines, A and B Particulars Mine A Mine B 1 Distance from railway station (one way) (kms) 15 2 Distance from railway station (kms) (both ways or length of Journey per trip) 3 Speed of lorries (kms per hour) 30 4 Time taken per trip (2) + (3) (minutes) 5 Loading time at mines (minutes) 6 Unloading time at railway station (minutes) 7 Total time taken per trip (4 + 5 + 6) 80 90 8 Driver's wages, depreciation, insurance and taxes (per hour 90 90 9 Driver's wages, depreciation insurance etc. per trip 120 135 10 Fuel, oil, tyres, repairs and maintenance cost (per km) 12 12 11 Fuel oil, tyres, repairs, etc. per trip (2) (10) 240 360 12 Total cost (9 + 11) 360 495 13 Total tonne- kms (Kms x capacity) 50 75 14 Cost per tonne - km (12 +13)) 72 6.6 - (80 X 190) + 60 - 120 * - (90 x 190) + 60 - 135 P. 13.10 A practising chartered accountant now spends 10 per km on taxi fare for his client's work. He is considering two other alternatives: the purchase of a new small car or an old big car. The estimated costs figure are: Particulars New small car Big old car Purchase price 3,50,000 2,00,000 Sale price of car after 5 years 1,90,000 1,20.000 Repairs and servicing per year 10,000 12.000 Taxes and insurance per year 17,000 7.000 Diesel price per litre 40 40 Diesel consumption (km/ltre) 10 7 He estimates that he covers 10,000 kms annually. Which of these alternatives will be cheaper: If his practice expands and he has to cover 19,000 kms per annum, what should be his decision? j25