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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
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 January February March April May June Miles driven 15,900 17,300 14,500 16,100 17,100 15,500 Total operating costs $9,000 $9,860 $8,600 $8,800 $8,600 $8,100 Month Miles driven January 15,900 February 17,300 March 14,500 April 16,100 May 17,100 June 15,500 Fresno Home Oil Services uses the high-low method to determine its operating cost equation and earns $0.50 per mile for 18,000 miles. Total operating costs $9,000 $9,860 $8,600 $8,800 $8,600 $8,100 What would Fresno's operating income (loss) be for a month if the company prepared a contribution margin income statement for the month? O A. $9,000 OB. ($1,175) O C. $900 OD. $8,100
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