Question 2 The following details December 2017. elati s relating to AI Hasheem T

Question

Question 2 The following details December 2017. elati s relating to AI Hasheem Transport Company for the year ending on 3 ng Omani Rials Cost of Vehicle Annual Road licence Annual Garage rent Insurance Supervision and Salaries Driver's wages per hour Cost of fuel per gallon Repairs and maintenance per mile Tyre Allocation per mile Estimated life of vehicle Annual Milegae run Miles run per gallorn 33,000 1,000 650 450 1,300 25 32 1.150 0.600 60,000 miles 10,000 miles 20 miles Charge interest at 6% per annum on cost of vehicle. The vehicle runs 15 miles per hour on an average. Required Prepare Operating cost sheet for the year ending on 31 December 2017 and also calculate operating cost per running mile.

Explanation / Answer

Al Hasheem Transport Company Operating cost Statement for the year ending on 31 December 2017 A.Fixed costs Supervision and salaries 1300 Annual Road License 1000 Annual Gurage rent 650 Insurance 450 interest 33000*6% 1980 Total Fixed costs 5380 B.Running Costs Cost of fuel (10000/20*32) 16000 Repairs and maintenance (10000*1.150) 11500 Trye Allocation (10000*0.600) 6000 Driver's wages (10000/15*25) 16667 Depreciation (33000/60000*10000) 5500 Total Running costs 55667 Total Operating costs 61047 Annual miles run 10000 Operating cost per running mile 6.10

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