In: Accounting
Annual depreciation | $ | 3,000 | Annual mileage | 14,640 | ||
Current year's loan interest | $ | 710 | Miles per gallon | 24 | ||
Insurance | $ | 860 | License and registration fees | $ | 125 | |
Average gasoline price | $ | 3.50 | per gallon | Oil changes/repairs | $ | 730 |
Parking/tolls | $ | 660 | ||||
a. | Calculate total annual operating cost of the motor vehicle. |
Total variable cost | $ | |
Total fixed cost | $ | |
Total annual operating cost | $ | |
b. | Calculate operating cost per mile. (Enter your answer in cents rounded to 1 decimal place.) |
Operating cost per mile | cents |
Annual depreciation | $ 3,000.00 | Annual mileage | 14,640 | ||
Current year's loan interest | $ 710.00 | Miles per gallon | 24 | ||
Insurance | $ 860.00 | License and registration fees | $ 125.00 | ||
Average gasoline price | $ 3.50 | per gallon | Oil changes/repairs | $ 730.00 | |
Parking/tolls | $ 660.00 | ||||
Variable cost calculation: | |||||
Annual Mileage | 14640 | ||||
÷ Miles per gallon | 24 | ||||
Gasoline required(in Gallons) | 610 | ||||
x Average gasoline price | 3.5 | ||||
Total price of gasoline | $ 2,135 | ||||
Fixed Cost | |||||
Annual depreciation | $ 3,000.00 | ||||
Current year's loan interest | $ 710.00 | ||||
Insurance | $ 860.00 | ||||
Parking/tolls | $ 660.00 | ||||
License and registration fees | $ 125.00 | ||||
Oil changes/repairs | $ 730.00 | ||||
Total Fixed Cost | $ 6,085.00 | ||||
a | Total variable cost | $ 2,135 | |||
Total fixed cost | $ 6,085 | ||||
Total annual operating cost | $ 8,220 | ||||
b | Total annual operating cost | $ 8,220 | |||
÷ Annual mileage | 14640 | ||||
Operating cost per mile | $ 0.56 | ||||
or | $0.6 | rounded to 1 decimal | |||