Question

(Ch5.1) WasteKing uses a fleet of trucks in its business, and wants to know how distance affects these costs. It’s Miles driven and Operating costs during the recent 5 months were as follow: in January 18,300 miles driven with the total operating cost of $11,200; in February 16,500 miles with $10,700; in March 14,500 miles with $9,600; in April 11,500 miles with $7,020; and in May 10,300 miles driven with $7,200 of operating cost. Using the high-low method, what is the variable cost per mile?

Select one:

a. All listed choices are incorrect.

b. $0.5225 rounded.

c. $0.50 rounded.

d. $0.61 rounded.

Answer 1

• Correct Answer = Option ‘C’ $ 0.50 rounded = Variable cost per mile

	Month	Miles	Cost
High Level	Jan	18,300	$                   11,200.00
Low Level	May	10,300	$                     7,200.00
Difference		8,000	$                     4,000.00
A	Difference in Cost		$                     4,000.00
B	Difference in miles		8,000
C = A/B	Variable cost per mile		$                           0.500