Allocating a fixed cost Last year, Wes Lloyd bought an automobile for $29,000 to use in his taxi business. He expected to drive the vehicle for 150,000 miles before disposing of it for $2,000. Wes drove 3,200 miles this week and 2,800 miles last week.

Required

a. Determine the total cost of vehicle depreciation this week and last week.

b. Explain why allocating the vehicle cost would or would not be relevant to decision making.