Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Regina Star delivers flowers for several local flower stores. She charges clients $0.85 per mile driven. Regina has determined she drives 1,200 miles in a
Regina Star delivers flowers for several local flower stores. She charges clients $0.85 per mile driven. Regina has determined she drives 1,200 miles in a month, her average operating cost is $0.80 per mile. If she drives 2,000 miles in a month, her aver operating cost is $0.60 per mile. Regina has used the high-low method to determine that her monthly cost equation is total co $600 + $0.30 per mile. Required: 1. Determine how many miles Regina needs to drive to break even. 2. Assume Regina drove 900 miles last month. Without making any additional calculations, determine whether she earned a p loss for the month.. 3. If Regina wants to earn $800 a month, determine how many miles she must drive. 4-a. Prepare a contribution margin income statement assuming Regina drove 1,200 miles last month. 4-b. Use the above information to calculate Regina's degree of operating leverage.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started