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You are the newly appointed transport manager for Super Trucking (Pty) Ltd, which operates as a logistics service provider for various industries throughout southern Africa. One of these vehicles is a 4x2 Rigid Truck and drawbar trailer that covers 48,000 km per year. Use the assumptions below to answer the following questions (show all calculations): Overheads R 176,200 Cost of capital (% of purchase price per annum) 11.25% Annual License Fees—Truck R 16,100 Driver Monthly cost R 18,700 Assistant Monthly cost R 10,500 Purchase price: - Truck R 1,130,000 Depreciation: straight line method Truck residual value 25% Truck economic life (years) 5 Purchase price: Trailer R 370,000 Tyre usage and cost (c/km) 127 Trailer residual value 0% Trailer economic life (years) 10 Annual License Fees—Trailer R 7,700 Fuel consumption (liters/100km) 22 Fuel price (c/liter) 2053 Insurance (% of cost price) 7.5% Maintenance cost (c/km) 105 Distance travelled per year (km) 48000 Truck (tyres) 6 Trailer (tyres) 8 New tyre price (each) R 13,400 Lubricants (% of fuel cost) 2.5% Working weeks 50 Working days 5 days / week Profit margin 25% VAT 15% Q1. Calculate the annual total vehicle costs (TVC)

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Answer to a math question You are the newly appointed transport manager for Super Trucking (Pty) Ltd, which operates as a logistics service provider for various industries throughout southern Africa. One of these vehicles is a 4x2 Rigid Truck and drawbar trailer that covers 48,000 km per year. Use the assumptions below to answer the following questions (show all calculations): Overheads R 176,200 Cost of capital (% of purchase price per annum) 11.25% Annual License Fees—Truck R 16,100 Driver Monthly cost R 18,700 Assistant Monthly cost R 10,500 Purchase price: - Truck R 1,130,000 Depreciation: straight line method Truck residual value 25% Truck economic life (years) 5 Purchase price: Trailer R 370,000 Tyre usage and cost (c/km) 127 Trailer residual value 0% Trailer economic life (years) 10 Annual License Fees—Trailer R 7,700 Fuel consumption (liters/100km) 22 Fuel price (c/liter) 2053 Insurance (% of cost price) 7.5% Maintenance cost (c/km) 105 Distance travelled per year (km) 48000 Truck (tyres) 6 Trailer (tyres) 8 New tyre price (each) R 13,400 Lubricants (% of fuel cost) 2.5% Working weeks 50 Working days 5 days / week Profit margin 25% VAT 15% Q1. Calculate the annual total vehicle costs (TVC)

Expert avatar
Neal
4.5
61 Answers
To calculate the annual total vehicle costs (TVC), we need to add up all the costs associated with the truck and trailer. Here are the calculations: Truck costs: Depreciation: The purchase price of the truck is R 1,130,000, and the residual value is 25%. Therefore, the depreciation per year is (1,130,000 * (1 - 0.25)) / 5 = R 678,000. Interest: The cost of capital is 11.25% of the purchase price per annum. Therefore, the interest per year is 0.1125 * 1,130,000 = R 127,125. License fees: The annual license fees for the truck are R 16,100. Driver cost: The monthly driver cost is R 18,700, which translates to an annual cost of 18,700 * 12 = R 224,400. Assistant cost: The monthly assistant cost is R 10,500, which translates to an annual cost of 10,500 * 12 = R 126,000. Tyre cost: The cost of tyres per km is 127 cents. The truck travels 48,000 km per year, and it has 6 tyres. Therefore, the total tyre cost per year is 127 * 48,000 * 6 = R 36,864. Maintenance cost: The maintenance cost per km is 105 cents. The truck travels 48,000 km per year. Therefore, the total maintenance cost per year is 105 * 48,000 = R 5,040. The total cost of the truck per year is: 678,000 + 127,125 + 16,100 + 224,400 + 126,000 + 36,864 + 5,040 = R 1,213,529 Trailer costs: Depreciation: The purchase price of the trailer is R 370,000, and the residual value is 0%. Therefore, the depreciation per year is (370,000 * (1 - 0)) / 10 = R 37,000. License fees: The annual license fees for the trailer are R 7,700. Tyre cost: The cost of tyres per km is 127 cents. The trailer travels 48,000 km per year, and it has 8 tyres. Therefore, the total tyre cost per year is 127 * 48,000 * 8 = R 48,768. Maintenance cost: The maintenance cost per km is 105 cents. The trailer travels 48,000 km per year. Therefore, the total maintenance cost per year is 105 * 48,000 = R 5,040. The total cost of the trailer per year is: 37,000 + 7,700 + 48,768 + 5,040 = R 98,508 Therefore, the annual total vehicle costs (TVC) is: 1,213,529 + 98,508 = R 1,312,037 Hence, the annual total vehicle costs (TVC) is R 1,312,037

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