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Joyce Murphy runs a courier service in downtown Seattle. She charges clients $0.43 per mile driven. Joyce has determined that if she drives 3,200 miles

Joyce Murphy runs a courier service in downtown Seattle. She charges clients $0.43 per mile driven. Joyce has determined that if she drives 3,200 miles in a month, her total operating cost is $1,025. If she drives 5,400 miles in a month, her total operating cost is $1,465. Joyce has used the high-low method to determine that her monthly cost equation is total monthly cost = $385 + $0.20 per mile driven. Required: Determine how many miles Joyce needs to drive to break even. Calculate Joyce's degree of operating leverage if she drives 5,600 miles. Suppose Joyce took a week off and her sales for the month decreased by 25 percent. Using the degree of operating leverage, calculate the effect this will have on her profit for that month.

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