It is based on cost-volume-profit.

I am considering to buy a hybrid car. The hybrid car will cost 5,400 more than a traditional car. The hybrid car has 40 miles per gallon while the traditional car has 30 per gallon. Assume that the gas cot $2.40 per gallon. (pd: I translated the information from Spanish because the original assignment is in Spanish, I will attach the info in Spanish just in case it is hard to understand the translation).

1- What is the variable cost in gas per mile in the hybrid car and in the traditional car?

2- Using the information from question (1), and assuming that the measurement units are "miles", What is the contribution margin of the hybrid car in relation with the traditional car?. Express the savings in variable costs based on each mile.

3- How many miles will you have to drive in order to achieve the break-even point with the hybrid car?

4- What other factor should be considered to buy the hybrid car?