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Exercise 11-14 (Algo) Identification of Relevant Costs [LO11-1] Insurance Kristen Lu purchased a used automobile for $9,200 at the beginning of last year and incurred
Exercise 11-14 (Algo) Identification of Relevant Costs [LO11-1] Insurance Kristen Lu purchased a used automobile for $9,200 at the beginning of last year and incurred the following operating costs Depreciation (59,200 + 5 years) $ 1,340 $1,000 Garage rent $ 500 Automobile tax and license $ 260 Variable operating cost 5 0.09 per sile 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 $1,840. The car is kept in a garage for a monthly fee Required: 1 Kinten drove the car 12.000 miles last year. Compute the average cost per mile of owning and operating the car. (Round your answers to 2 decimal places.) Average fixed cost per mile Variable operating cost per mile Average cost per me 2. 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? (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 outomatically graded as incorrect.) 2 Variable operating costs 2 Depreciation Automobile 2 License costs 2 surance costs
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