CA Inter P4 · Chapter 11 · Question 8 of 8
In the operating cost sheet of a goods transport company, which of the following is treated as a standing (fixed) charge?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Insurance of the vehicle
Explanation
Standing charges are fixed costs incurred irrespective of the distance run, such as insurance, road tax, garage rent and salaries of permanent staff. Running charges such as diesel, lubricants and tyre wear vary with the kilometres operated.
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