Management Accounting/Jarmo Kulhelm Costs behavior/Motoring costs Cost data in euros Cost/price of a car 25000 Trade-in price after 3 years 13000 Maintenance costs- 6 month service costs 300 Spares/replacement parts per 1000 kilometers 100 Vehicle licence/tax per annum 140 Insurance, per annum 400 Tyre replacements after 25 000 kilometers four tyres at 80.00 each Petrol per litre 1.40 Average kilometers per one litre is 10 kilometers

a) From the above data you are required: (i) to prepare a schedule to be presented to management showing the kilometers of 10 000, 15 000, 20 000 and 30 000 kilometers per annum: (1) total variable cost (2) total fixed cost (3) total cost (4) variable cost per kilometer (5) fixed cost per kilometer (6) total cost per kilometer

b) "The more kilometer you drive, the cheaper it becomes". Comment briefly on this statement. Schedule of annual cost for motoring 10000 15000 20000 30000 Variable costs: Total variable cost 0 0 0 0 Variable cost per kilometer 0 0 0 0 Fixed costs Total fixed cost 0 0 0 0 Fixed cost per kilometer Total cost Total cost per kilometer