Chegg had this same question posted but the answer was worng. Thank you for your

Question

Chegg had this same question posted but the answer was worng. Thank you for your help. My first part was right stuggling with the second half

Joyce Murphy runs a courier service in downtown Seattle. She charges clients $0.60 per mile driven. Joyce has determined that if she drives 2,650 miles in a month, her total operating cost is $825. If she drives 3,750 miles in a month, her total operating cost is $1,045.     

Required:
1. Using the high-low method, determine Joyce’s variable and fixed operating cost components. (Round your cost per unit answer to 2 decimal places.)

       

Variable Cost per Mile Driven

$0.20

Fixed Cost

$295

2. Complete the contribution margin income statement for Joyce’s service assuming she drove 1,850 miles last month. (Assume this falls within the relevant range of operations).

JOYCE MURPHY

Contribution Margin Income Statement

For the Last Month

Sales Revenue

Variable Costs

Contribution Margin

Fixed Costs

Net Operating Income

Variable Cost per Mile Driven

$0.20

Fixed Cost

$295

Explanation / Answer

Required - 1

Required - 2

Note : while filling above format .......... we have only one item for variable cost and one item for fixed cost, hence any additional rows can simply be ignored. Hope your struggling is resolved with above work. All the best.

Cost Miles High 1045 3750 Low 825 2650 Difference 220 1100 Variable cost Per mile = Difference in cost / Diff in miles     = 220 / 1100 = 0.20 per mile Fixed cost = Total cost - Variable cost    = 1045 - 3750 * 0.20   =   295

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.