Question

Joyce Murphy runs a courier service in downtown Seattle. She charges clients $0.50 per mile driven. Joyce has determined that if she drives 3,300 miles in a month, her total operating cost is $875. If she drives 4,400 miles in a month, her total operating cost is $1,095.

Required:
1. Using the high-low method, determine Joyce’s variable and fixed operating cost components.
Show this as a linear formula (y = a + bx).
2. Prepare a contribution margin income statement for Joyce’s service assuming she drove 2,400 miles last month.



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  • CreatedFebruary 27, 2015
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