PDF · Notes
Operating Costing Notes: Service Costing Solved Problems for CMA Inter Cost Accounting
- Shared by
- Ritesh A.
- Course
- CMA Inter
- Subject
- Cost Accounting
- Added
- 28 Oct 2026
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These notes cover operating costing, with a focus on service costing for transport undertakings. The first pages work through solved problems on calculating total kilometres, passenger kilometres and absolute and commercial tonne kilometres for buses and lorries with multiple stops. They also show how to prepare a statement of fixed and variable cost per running kilometre. The material suits CMA Inter students who are preparing the Cost Accounting paper and need practice on unit costing for transport services.
What the notes cover
The preview covers the basic formulas used in service costing. It includes calculating total kilometres run by a fleet from the number of buses, days operated, trips and route distance. It then moves to passenger kilometres, using capacity and the percentage of seats normally filled. Tonne kilometres are worked out for lorries that load and unload at intermediate stations, showing the difference between absolute and commercial tonne kilometres. Each problem is followed by its answer so you can check your working.
How to use them for revision
Work through each question on paper before reading the answer given. Start with the kilometre and passenger kilometre problems, since the later cost sheet questions depend on these figures. Then attempt the tonne kilometre questions, paying attention to where the load is unloaded at each station. Once comfortable with the calculations, practise the cost per kilometre statements, separating fixed charges such as depreciation and insurance from variable charges such as fuel and wages.
Who should read them
These notes are useful for CMA Inter students revising operating costing under the Cost Accounting subject. They are also helpful for students who find service costing unit calculations confusing and want step-by-step examples. Students preparing for exams may use the preview to decide whether the full set of 16 pages matches the depth they need.
Key topics in these notes
- Total kilometres and passenger kilometres
- Absolute tonne kilometres
- Commercial tonne kilometres
- Fixed and variable cost per running km
- Cost per passenger km
- Bus fare calculation with profit margin
- Service costing cost sheet
Frequently asked questions
What is the difference between absolute and commercial tonne kilometres?
Absolute tonne kilometres measure the load carried over each leg of the journey, while commercial tonne kilometres are based on the load actually paid for. The preview solves examples of both for a lorry with intermediate unloading.
How is total passenger kilometre calculated in these notes?
Total passenger kilometres are found by multiplying total kilometres run by bus capacity and the percentage of normal occupancy. Worked examples with 80 and 90 percent occupancy are given.
Do these notes include cost per kilometre statements?
Yes, the preview includes a question asking for a statement showing fixed and variable cost per running kilometre for a fleet of lorries.
Is this note useful for CMA Inter Cost Accounting?
The notes cover operating costing and service costing problems in the style used for CMA Inter Cost Accounting practice.
How can I get the full PDF?
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