16 points Joyce Murphy nuns a courier service in downtown Saarte She charges cle

Question

16 points Joyce Murphy nuns a courier service in downtown Saarte She charges clents S0 58 per mile driven. Joyce has determined that t she dies 2, 150 miles in a month, her botal oceratingWil?S$575, if she dnes3,250 mles na moth, her total operating cost is sist. Required: 1. Using the high-low method, detemine Joyce's variable and fxed operating cost components. JRound your cost per unit answer to 2 decimal places) Varlable Cos Fxed Cost 2Complete the contibution margin income statement o Joyoe's service assuming she dreve 1,300 miles lst onth Assume this talls within the selevant range of operations Margin Income ContributionMag command option ption command

Explanation / Answer

Miles Cost High Activity 2150 575 Low Activity 3250 751 Change 1100 176 Variable cost per mile: Change in cost / Change in miles 176 / 1100 = 0.16 per mile. Fixed cost: Total cost of 2150 miles: 575 Less: Variable cost (2150*0.16) 344 Fixed cost: 231 Req 2: Contribution margin income statement: Sales revenue (1300 miles @ 0.56) 728 Less: Variable cost (1300 miles @ 0.16) 208 Contribution margin   520 Less: Fixed cost 231 Net Operating income 289

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