12-14-40 points Check my work Kristen Lu purchased a used automobile for $37,850
ID: 2516442 • Letter: 1
Question
12-14-40 points Check my work Kristen Lu purchased a used automobile for $37,850 at the beginning of last year and incurred the following operating costs Depreciation ($37,850+5 years) Insurance Garage rent Automobile tax and license Variable operating cost s 7,570 $3,900 2,000 1,030 8.13 per mile The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates that, at her current rate of usage, the car will have zero resale value in five years, so the annual straight-line depreciation is $7,570. The car is kept in a garage for a monthly fee. Required 1. Kristen drove the car 29,000 miles last year. Compute the average cost per mile of owning and operating the car. (Round your answers to 2 decimal places.) Average fixed cost per mile Variable operating cost per mile Average cost per mile S 000Explanation / Answer
Answer:
Fixed cost per mile
($14500 ÷ 29,000 miles)
0.50
Variable operating cost per mile
0.13
Average cost per mile
0.63
Working notes for the above answer is as under
1
calculation for the Total Fixed cost
Depreciation
7570
Insurance
3900
Garage rent
2000
Automobile tax and license
1030
Total Fixed cost
14500
Fixed cost per mile
($14500 ÷ 29,000 miles)
0.50
Variable operating cost per mile
0.13
Average cost per mile
0.63
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.