The main purpose of costing for toll roads is to calculate the Toll rate. Interest expenses incurred for servicing term loans.Maintenance expenses include routine and periodic maintenance.Administrative expenses for day-to-day operation.Operating and Maintenance expenses can be broadly classified as follows: Routine maintenance involves Patching of potholes, sealing of cracks, Edge Repair, Surface Renewal, Periodic maintenance for new highways would be met with in accordance with the analysis of the life cycle model carried out for the project. Routine maintenance cost would be incurred once the Toll road is operational. Overheads incurred in the course of actual construction.Construction expenses can be broadly classified as follows: The cost incurred during the construction of roads, other structures, consultancy charges, tool booths etc are called as capital costs and run across multiple financial years. The Construction of roads is very important for the infrastructural development of any country and the cost consists of the following two components (iii) Semi-variable costs or Maintenance costs include the following: O Wages to Driver, Conductor, Cleaners, etc if it is related to operations (ii) Variable costs or Running costs include the following: O Salary to Driver, Conductor, Cleaners, etc if paid on monthly basis (i) Standing Charges or Fixed costs include the following: The costs are shown under the following heads: The cost unit for Goods transport organization is Ton– Kilometer – that means cost of carrying one Ton of goods over a distance of one kilometer.Ĭost unit for Passenger transport organization is Passenger– Kilometer – that means cost of carrying one Passenger over a distance of one kilometer. Transport organizations can be divided into two categories viz. The costing should be comprehensive enough to show the effects like off-season and peak-season demand, full time, part time, etc. Per course, per student, per batch, per lecture etc. per letter of credit, per application, per project etc.) Patient per day, room per day or per bed, per operation etc. Passenger- km., (In public transportation) Quintal- km., or Ton- km. Other typical cost units that may be used include: Service industry The cost unit to be applied needs to be defined carefully and frequently, a composite cost unit may be deemed more appropriate.įor example, Hotels may use the ‘Occupied Room Days’ as an appropriate unit for cost ascertainment and control. Selection of a proper cost unit is a difficult task. So the principal of unit costing is used in service costing.ĭetermining the suitable cost unit to be used for cost ascertainment is a major problem in service costing.The cost of rendering the service for particular period is related to quantum of services rendered during the particular period to arrive at cost per unit of service rendered. Service costs are collected periodically like process cost.
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