Annual depreciation $ 3,000 Annual mileage 14,640 Current year's loan interest $ 710 Miles per gallon...

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

Expert Solution

	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

ekkarill92 answered 2 years ago

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