Question 2 - Motor Car Cost of motorcar £10,000 Trade-in price after 2 years or

Question

Question 2 - Motor Car

                       Cost of motorcar                                          £10,000

                       Trade-in price after 2 years or
           60,000miles                                                    £2,000

                       Maintenance (6 monthlyservicing)                    £120

                       Spares (per 1,000miles)                                       £40

                       Road Tax (perannum)                                       £150

                       Insurance (perannum)                                       £450

                       Tyres (after 25,000miles)                                  £240

                       Petrol (perLitre)                                               £2.10

                       Petrol consumption is 25 mpg.

From the above data you are required:

Calculatemanually the following costs:

1.      Total variable cost

2.      Total fixed cost

3.      Total cost

4.      Variable cost per mile

5.      Fixed cost per mile

6.      Total cost per mile.

The latter threecosts should be shown to the nearest penny.

For 0, 5,000,10,000, 20,000 and 30,000 miles per annum.

Explanation / Answer

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