Kristen Lu purchased a used automobile for $10,100 at the beginning of last year and incurred the following operating costs Depreciation ($10,100 5 years) $ 2,020 Insurance $ 1,100 Garage rent $ 600 Automobile tax and license $ 280 Variable operating cost $ 0 14 per mile The variable operating cost...

Kristen Lu purchased a used automobile for $10,100 at the beginning of last year and incurred the

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Question:

Kristen Lu purchased a used automobile for $10,100 at the beginning of last year and incurred the following operating costs:


Depreciation ($10,100 ÷ 5 years)	$	2,020
Insurance	$	1,100
Garage rent	$	600
Automobile tax and license	$	280
Variable operating cost	$	0.14	per mile

The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates that, at her current rate of usage, the car will have zero resale value in five years, so the annual straight-line depreciation is $2,020. The car is kept in a garage for a monthly fee.

Required:

Kristen drove the car 10,000 miles last year. Compute the average cost per mile of owning and operating the car.