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Firefox File Edit View History Bookmarks Tools Window Help ?Student Services-Di? × ?CSUF Portal-Home × ?TITANium D ezto.mheducation.com/hm.tpx?_-0.4086246059714591 15229846 Your Firefox is critically out of date. An update is required to stay secure Update Now Kristen Lu purchased a used automobile for $31,250 at the beginning of last year and incurred the following operating costs: Depreciation ($31,250+5 years) $6,250 Garage rent Automobile tax and license Variable operating cost $1,700 $850 50.09 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 $6,250. The car is kept in a garage for a monthly fee. Required: Kristen drove the car 30,000 miles last year. Compute the average cost per mile of owning and operating the car. (Round your answers to 2 decimal places.) Fixed cost per mile Variable operating cost per mile Average cost per mile 2. Kristen is unsure about whether she country trip for two weeks during may select more than one answer. Single click the box with a check mark for correct and double click to empty the box for the wrong answers.) should use her own car or rent a car to go on an extended cross- spring break. What costs above are relevant in this decision? (You answers Variable operating costs 2 Depreciation Automobile tax License costs Insurance costs

Explanation / Answer

Depreciation 6,250 Insurance 3,200 Garage rent 1,700 Automobile tax and license 850 total cost 12,000 1) fixed cost per mile (12000/30000) 0.4 Variable operating cost per mile 0.09 Average cost per mile 0.49 2) Variable operating costing Relevant Depreciation irrelevant Automobile tax irrelevant license costs irrelevant insurance costs irrelevant

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