A transport company supplies the following details in respect of a truck of 5 tonne capacity. The truck carries goods to and from the city covering a distance of 50 kms each way. While going to the...

A transport company supplies the following details in respect of a truck of 5 tonne capacity.

The truck carries goods to and from the city covering a distance of 50 kms each way. While going to the city, freight is available for a full load of the truck and on its return journey it can fetch freight only up to 20 per cent of its capacity. Truck has no salvage value at year-end 10.

On the assumption that the truck runs on an average 25 days a month, you are required to determine the following: (i) operating cost per tonne– km, (ii) rate per tonne per trip that the company should charge if profit of 100 per cent on cost is to be earned, and (iii) what price would you charge if one wants to engage the truck for one day for a trip to the city and back?