QUESTION $3[20$ MARKS$]$

You are the transport manager of TransLog Carriers that operate a fleet of $25$ combination vehicles in various industries throughout southern Africa. One of these vehicles is a six$-$axle combination vehicle consisting of a $6$x$4$ truck tractor & tridem semi$-$trailer that cover $140000$ km per annum. Use the assumptions below to determine the following $($show all calculations$)$:

Overheads $-$ Administration

R $199,000$

Cost of capital $(\%$ of purchase price per annum$)$

$7\mathrm{.}00\%$

Annual License Fees $-$Truck Tractor

R $18,200$

Driver Monthly cost

R $52,000$

Assistant Monthly cost

R $20,200$

Purchase price $-$ Truck tractor

R $1,980,000$

Overheads $-$ Operations

R $132,800$

Depreciation $-$ straight line method

Truck tractor residual value

$25\%$

Truck tractor economic life $($years$)$

$5$

Purchase price $-$ Trailer$($s$)$

R $1,055,000$

Tyre usage and cost $($c$/$km$)$

$308$

Trailer residual value

$0\%$

Trailer economic life $($years$)$

$10$

Annual License Fees $-$Trailers

R $17,100$

Fuel consumption $($liter $/100$km$)$

$57$

Fuel price $($c$/$liter$)$

$1240$

Insurance $(\%$ of cost price$)$

$7\mathrm{.}5\%$

Maintenance cost $($c$/$km$)$

$402$

Distance travelled per annum $($km$)$

$140000$

Truck tractor $($tyres$)$

$10$

Trailer $($tyres$)$

$16$

New tyre price $($each$)$

R $24,800$

Lubricants $(\%$ of fuel cost$)$

$2\mathrm{.}5\%$

Working weeks

$50$

Working days

$5$ days $/$ week

Profit margin $20\%$

VAT $15\%$

$3\mathrm{.}1.$ Calculate the annual total vehicle costs $($TVC$).(15$ marks$)$

$3\mathrm{.}2.$ What will the TVC per annum be at an annual travel distance of $120000$ km and $160000$ km respectively? What do you observe of the total vehicle cost per km$?(6$ marks$)$