Joyce Murphy runs a courier service in downtown Seattle. She charges clients $0.60 per mile driven. Joyce has determined that if she drives 2,650 miles in a month, her total operating cost is $825. If she drives 3,750 miles in a month, her total operating cost is $1,045.

Required:

1. Using the high-low method, determine Joyces variable and fixed operating cost components.

2. Complete the contribution margin income statement for Joyces service assuming she drove 1,850 miles last month. (Assume this falls within the relevant range of operations).

Using the high-low method, determine Joyces variable and fixed operating cost components. (Round your cost per unit answer to 2 decimal places.)

Variable Cost per Mile Driven
Fixed Cost

Complete the contribution margin income statement for Joyces service assuming she drove 1,850 miles last month. (Assume this falls within the relevant range of operations).

JOYCE MURPHY
Contribution Margin Income Statement
For the Last Month
Contribution Margin
Net Operating Income