Question
Answer the following question(s) using the information below. Fresno Home Oil Services wants to determine a fuel surcharge to add to its customers' bills based
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Answer the following question(s) using the information below.
Fresno Home Oil Services wants to determine a fuel surcharge to add to its customers' bills based on the number of miles driven to each area. It wants to separate the fixed and variable portion of the truck's operating costs so it has a better idea of how distance affects these costs. Fresno Home Oil Services has the following data available.
Month | Miles driven | Total operating costs |
January | 15,900 | $9,000 |
February | 17,300 | $9,860 |
March | 14,500 | $8,600 |
April | 16,100 | $8,800 |
May | 17,100 | $8,600 |
June | 15,500 | $8,100 |
Fresno Home Oil Services uses the
highlow
method to determine its operating cost equation and earns $0.50 per mile for 18,000 miles.
What would Fresno's operating income (loss) be for a month if the company prepared a traditional income statement for a month?
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