Check my work Kristen Lu purchased a used automobile for $23,750 at the beginnin

Question

Check my work Kristen Lu purchased a used automobile for $23,750 at the beginning of last year and incurred the following operating costs Depreciation ($23,758 5 years) Insurance Garage rent Automobile tax and license Variable operating cost s 4,750 2,500 $ 1,3e0 650 $ e.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 $4,750. The car is kept in a garage for a monthly fee. s Required: 1. Kristen drove the car 23,000 miles last year Compute the average cost per mile of owning and operating the car. (Round your answers to 2 decimal places.) operating cost per mile cost per mile Prey 2of 2E Next

Explanation / Answer

Fixed cost: Depreciation 4750 Insurance 2500 Garage rent 1300 Automobile tax and licence 650 Total Fixed cost 9200 Divide: Number of hrs operated 23750 Fixed cost per mile 0.387 per mile Add: Variable per mile 0.13 per mile Average fixed cocst pr milt 0.387 Variable cocst per milt 0.13 Average cost per mile 0.517

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