Question
Swati, a mini-bus operator has just entered into business. She needs your help in calculating and suggesting the fare per passenger-km from the following information:
Swati, a mini-bus operator has just entered into business. She needs your help in calculating and suggesting the fare per passenger-km from the following information:
i. Length of the route 30 kms
ii. Purchase price of the mini-bus Rs. 4 lacs
iii. Part of the above cost is meet by a loan, annual interest cost is Rs. 10,000/-
iv. Other Annual Charges
a. Insurance Rs. 15,000/-
b. Garage Rent Rs. 9,000/-
c. Road Tax Rs. 3,000/-
d. Repairs & Maintenance Rs.15,000/-
e. Administrative Charges Rs. 5,000/-
v. Running Expenses
a. Driver and Conductors Salary p.m. Rs. 5,000/-
b. Repairs//Replacement of tyre- tube p.a. Rs. 3,600/-
c. Diesel and Oil Cost per km Rs. 5/-
vi. Effective estimated useful life of vehicle is 5 years and estimated scrap value is Rs. 10,000/-.
vii. Mini- bus has 20 seats and is planned to make 6 two-way trips for 25 days per month.
Provide profit at 20% of total revenue
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