Q.1) WHT IS TRANSPORTATION COST STRUCTURES?
There are four basic costs associated with transportation; a) fixed costb) variable cost c) joint cost d) common cost.
It does not vary with a change in output, at least for a given period. E.g.:capital invested in trucks, tractors, carriers etc.
It varies with change in output. It goods are taken for long distance, itincreases and vice-versa.e.g.: fuel costs, maintenance costs, tyre replacement costs etc.
It is the cost when the production of one product or service requires theproduction f another product or service.e.g.: when a truck goes from point A to B, there is an unavoidable cost of joint cost from A o B.
These costs cannot be directly associated with any one shipment, if thecarrier is carrying more than are shipment.e.g.: if a carrier carrying three shipments, breaks down and RS. 5000 isincurred, to repair it. How much of this cost is allocated to each shipment.