#7

Joyce Murphy runs a courier service in downtown Seattle. She charges clients $0.62 per mile driven. Joyce has determined that if she drives 2,450 miles in a month, her total operating cost is $725. If she drives 3,550 miles in a month, her total operating cost is $857.

Required:

1. Using the high-low method, determine Joyces variable and fixed operating cost components.

2. Complete the contribution margin income statement for Joyces service assuming she drove 1,600 miles last month. (Assume this falls within the relevant range of operations).

Using the high-low method, determine Joyce's variable and fixed operating cost components. (Round your cost per unit answer to 2 decimal places.) Variable Cost per Mile Driven Fixed Cost Required 1 Required 2 Required 1 Required 2 Complete the contribution margin income statement for Joyce's service assuming she drove 1,600 miles last month. (Assume this falls within the relevant range of operations). JOYCE MURPHY Contribution Margin Income Statement For the Last Month Sales Revenue Variable Costs Contribution Margin Fixed Costs Net Operating Income