Charlie Stork rented a truck for his business on two previous occasions. Since he will soon be renting a truck again, he would like to analyze his bills and determine how the rental fee is calculated. His two bills for truck rental show that on September 1, he drove 1,000 miles and the bill was $1,500, and on December 5, he drove 600 miles and the bill was $1,380. 

Required

 Construct a spreadsheet to calculate the variable and fixed costs of this mixed cost that will allow Mr. Stork to predict his cost if he drives the truck 700 miles. The cells that show as numbers should all be formulas except C5, C6, E5, E6, and C18. Constructing the spreadsheet in this manner will allow you to change numbers in these five cells to recalculate variable cost, fixed cost, or predicted total cost. 

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Spreadsheet Tip

1. To format cells to show dollar signs, commas, or both, choose Format, then Cells, then click on the tab titled Numbers, and choose Accounting. 

Transcribed Image Text:

ch02-working. xls H. 1 Chapter 2- Working with Excel Name: Rental Miles Cost Driven $ 1500 1,380 120 High 1,000 Low 600 7. Difference 400 8. Variable cost per mile = Variable cost per mile = Change in Total Cost/Change in Miles $ 0.30 per mile 10 11 12 Fixed cost = Fixed cost = Total Cost - Variable Cost $ 1,200 13 14 15 $ 1,200 + $ 0.30 per mile x Predicted Mileage 16 Predicted Cost = 17 If pradicted mileage is: 18 700 19 $ 1,410 20 Predicted Cost = 21