Kristen Lu purchased a used automobile for $21,500 at the beginning of last year and incurred the following operating costs:
Depreciation ($21,500 ÷ 5 years) | $ | 4,300 | |
Insurance | $ | 2,300 | |
Garage rent | $ | 1,200 | |
Automobile tax and license | $ | 600 | |
Variable operating cost | $ | 0.10 | 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 $4,300. The car is kept in a garage for a monthly fee.
Required:
1. Kristen drove the car 21,000 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:
Average Operating cost per mile:
Average Cost per mile:
1 | ||
Average Fixed Cost per mile | 0.40 | =8400/21000 |
Variable Operating cost per mile | 0.10 | |
Average Cost per mile | 0.50 | |
Workings: | ||
Depreciation | 4300 | |
Insurance | 2300 | |
Garage rent | 1200 | |
Automobile tax and license | 600 | |
Total fixed cost | 8400 |
Kristen Lu purchased a used automobile for $21,500 at the beginning of last year and incurred...
Kristen Lu purchased a used automobile for $22,000 at the beginning of last year and incurred the following operating costs: Depreciation ($22,000 = 5 years) Insurance Garage rent Automobile tax and license Variable operating cost $ 4,400 $ 2,300 $ 1,200 $ 600 $ 0.09 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...
Kristen Lu purchased a used automobile for $29,000 at the beginning of last year and incurred the following operating costs: Depreciation ($29,000 ÷ 5 years) $ 5,800 Insurance $ 3,000 Garage rent $ 1,600 Automobile tax and license $ 800 Variable operating cost $ 0.13 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...
Kristen Lu purchased a used automobile for $21,500 at the beginning of last year and incurred the following operating costs: Depreciation ($21,500 ÷ 5 years) $ 4,300 Insurance $ 2,300 Garage rent $ 1,200 Automobile tax and license $ 600 Variable operating cost $ 0.10 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...
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Kristen Lu purchased a used automobile for $17,550 at the beginning of last year and incurred the following operating costs: Depreciation ($17,550 ÷ 5 years) $ 3,510 Insurance $ 1,900 Garage rent $ 1,000 Automobile tax and license $ 490 Variable operating cost $ 0.13 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...
Kristen Lu purchased a used automobile for $20,250 at the beginning of last year and incurred the following operating costs: Depreciation ($20,250 ÷ 5 years) $ 4,050 Insurance $ 2,100 Garage rent $ 1,100 Automobile tax and license $ 550 Variable operating cost $ 0.08 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...
Kristen Lu purchased a used automobile for $36,050 at the beginning of last year and incurred the following operating costs: Depreciation ($36,050 ÷ 5 years) $ 7,210 Insurance $ 3,800 Garage rent $ 2,000 Automobile tax and license $ 990 Variable operating cost $ 0.12 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...
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 Insurance $ 3,200 Garage rent $ 1,700 Automobile tax and license $ 850 Variable operating cost $ 0.15 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...
Exercise 11-14 Identification of Relevant Costs (LO11-11 Kristen Lu purchased a used automobile for $32,050 at the beginning of last year and incurred the following operating costs: Depreciation ($32,50 5 years) Insurance Garage rent Automobile tax and license Variable operating cost $6,410 $3,400 $1,800 $ 890 $ 0.89 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...
Exercise 11-14 Identification of Relevant Costs [LO11-1) Kristen Lu purchased a used automobile for $35,200 at the beginning of last year and incurred the following operating costs: Depreciation ($35,200 = 5 years) Insurance Garage rent Automobile tax and license Variable operating cost $ 7,040 $3,600 $1,900 $ 960 $ 0.14 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...