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Russell Preston delivers parts for several local auto parts stores. He charges clients $ 0 . 7 5 per mile driven. Russell has determined that
Russell Preston delivers parts for several local auto parts stores. He charges clients $ per mile driven. Russell has determined that if he drives miles in a month, his average operating cost is $ per mile. If he drives miles in a month, his average operating cost is $ per mile. Russell has used the highlow method to determine that his monthly cost equation is total cost $$ per mile.
Required:
Determine how many miles Russell needs to drive to break even.
Assume Russell drove miles last month. Without making any additional calculations, determine whether he earned a profit or a loss last month.
Determine how many miles Russell must drive to earn $ in profit.
a Prepare a contribution margin income statement assuming Russell drove miles last month.
b Use the information provided in Req a to calculate Russell's degree of operating leverage.
Complete this question by entering your answers in the tabs below.
Req
Req
Req
Determine how many miles Russell needs to drive to break even.
Note: Do not round your intermediate calculations.
BreakEven Miles
Miles
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