Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Kristen Lu purchased a used automobile for $ 1 3 , 2 0 0 at the beginning of last year and incurred the following operating

Kristen Lu purchased a used automobile for $13,200 at the beginning of last year and incurred the following operating costs:
Depreciation ($13,200-: 5 years) $ 2,640
Insurance $ 1,400
Garage rent $ 700
Automobile tax and license $ 360
Variable operating cost $ 0.08 per mile
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 $2,640. The car is kept in a garage for a monthly fee.
Required:
1. Kristen drove the car 17,000 miles last year. Compute the average cost per mile of owning and operating the car. (Round your answers to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Ray Garrison, Eric Noreen, Peter Brewer

16th edition

1259307417, 978-1260153132, 1260153134, 978-1259307416

More Books

Students also viewed these Accounting questions

Question

What are the NET Act and the DMCA?

Answered: 1 week ago

Question

How do direct labor costs flow through a job-order costing system?

Answered: 1 week ago