Question: Item 1 1 . 4 2 points Return to question Item 1 Exercise 1 3 - 1 ( Algo ) Identification of Relevant Costs [

Item1
1.42points
Return to question
Item 1
Exercise 13-1(Algo) Identification of Relevant Costs [LO13-1]
Kristen Lu purchased a used automobile for $28,150 at the beginning of last year and incurred the following operating costs:
Depreciation ($28,1505 years)$ 5,630Insurance$ 2,900Garage rent$ 1,500Automobile tax and license$ 770Variable operating cost$ 0.10per mile
The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates, at her current rate of usage, the car will have zero resale value in five years, so the annual straight-line depreciation is $5,630. The car is kept in a garage for a monthly fee.
Required:
Kristen drove the car 27,000 miles last year. Compute the average cost per mile of owning and operating the car.
Note: Round your answers to 2 decimal places.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!