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Exercise 1 3 - 1 ( Algo ) Identification of Relevant Costs [ LO 1 3 - 1 ] Required: Kristen drove the car 2

Exercise 13-1(Algo) Identification of Relevant Costs [LO13-1] Required:
Kristen drove the car 27,000 miles last year. Compute the average cost per mile of owning and operating the car.
Note: Round your answers to 2 decimal places.
Average fixed cost per mile
Variable operating cost per mile
Average cost per mile
Kristen is unsure about whether she should use her own car or rent a car to go on an extended cross-country trip for two weeks
during spring break. What costs above are relevant in this decision?
Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct
answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question
mark will be automatically graded as incorrect.
? Variable operating costs
? Depreciation
? Automobile tax
? License costs
? Insurance costs
Kristen Lu purchased a used automobile for $35,200 at the beginning of last year and incurred the following operating costs:
The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates, at her current rate of usage, the
car will have zero resale value in five years, so the annual straight-line depreciation is $7,040. The car is kept in a garage for a monthly
fee.
Required:
Kristen drove the car 27,000 miles last year. Compute the average cost per mile of owning and operating the car.
Note: Round your answers to 2 decimal places.
Kristen is unsure about whether she should use her own car or rent a car to go on an extended cross-country trip for two weeks
during spring break. What costs above are relevant in this decision?
Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct
answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question
mark will be automatically graded as incorrect.
? Variable operating costs
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