i Chrome File Edit ie History Bookmarks People Window Help D D, Sun 1:50 PM a E

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i Chrome File Edit ie History Bookmarks People Window Help D D, Sun 1:50 PM a E Garrison CH 12 Exercises C | ezto.mheducation.com/hm.tpx?--0.6388662293375588 1509907768 123 ACCT 1005: Fall 2017 ACCT 1005 Storee Smith Garrison CH12 Exercises instructions I help Question 1 (of 7) Save & Exit Submit value: 4.32 points Kristen Lu purchased a used automobile for S13,600 at the beginning of last year and incurred the following operating costs: Depreciation ($13,600 5 years) Insurance Garage rent Automobile tax and license Variable operating cost $2,720 S1,500 $B00 $380 s0.07 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 $2,720. The car is kept in a garage for a monthly fee Required: 1. Kristen drove the car 18,000 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 0.00 5

Explanation / Answer

1 Fixed cost per mile 0.3 =(2720+1500+800+380)/18000 Variable operating cost per mile 0.07 Average cost per mile 0.37 2 Variable operating costs Relevant Depreciation Irrelevant Automobile tax Irrelevant License costs Irrelevant Insurance costs Irrelevant

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