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Unit 1: Service Costing

Transport Costing: Refers to the determination of the cost per unit of service i.e., cost of per Notes
passenger – kilometre and the cost of per tone – kilometre.

1.7 Review Questions

1. What do you mean by operating costing? Discuss its methods.
2. Discuss the nature and applications of operating costing.
3. What are the classifications of operating cost?
4. What are the objectives of transport costing? Explain.
5. What is power house costing? Explain its objectives.

6. Define hotel costing. Discuss its objectives in detail.
7. What do you mean by cinema costing? Discus its objectives.
8. Define hospital costing. Explain various objectives of hospital costing.

9. What do you mean by canteen costing? Discuss its objectives.
10. Singh Travels, a transport company, is running a fleet of six buses between two towns 75
kms apart. The seating capacity of each bus is 40 passengers. The following particulars are
available for the month of May, 2007.
(i) Salaries of office and supervisory staff ` 1,500
(ii) Wages of drivers, conductors and cleaners ` 3,600

(iii) Taxes and insurance ` 2,400
(iv) Interest and other charges ` 3,000
(v) Repairs and maintenance ` 1,200
(vi) Depreciation ` 3,000
(vii) Diesel and oils ` 10,320

Total ` 25,020

The actual passengers carried were 80% of the seating capacity. All buses ran on all day in
the month. Each bus made one trip per day. Find out the cost per passenger-kilometre.
Answers: Self Assessment

1. Services 2. Service costing
3. Tangible 4. Service
5. Internal 6. False
7. True 8. False

9. Transport 10. Trip
11. Cost 12. Hotel
13. Hospital 14. Canteen
15. CLMA

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