Question

Relevant costs suppose the current average cost per mile for operating a car is $0.40. Susan is required to drive to a client’s office that is 50 miles away (100 miles round-trip). She can use her own car and be reimbursed $0.30 per mile or use a company-owned vehicle.

REQUIRED
A. What costs would be included in the current average cost per mile that might be irrelevant to Susan’s decision to drive 100 miles?
B. Suppose Susan determined that the cost of gasoline and maintenance for her car is about $0.25 per mile. Which alternative is better?



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  • CreatedJanuary 26, 2015
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