esKristen Lu purchased a used automobile for $33,900 at the beginning of last year andincurred the following operating costs:Depreciation ($33,900 ÷ 5 years)InsuranceGarage rentAutomobile tax and licenseVariable operating cost$ 6,780$ 3,500$ 1,800$ 920$ 0.15 per mileThe 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 infive years, so the annual straight-line depreciation is $6,780. The car is kept in agarage for a monthly fee.Required:1. Kristen drove the car 26,000 miles last year. Compute the average cost per mile ofowning and operating the car.Note: Round your answers to 2 decimal places.Average fixed cost per mileVariable operating cost per mileAverage cost per mile2. Kristen is unsure about whether she should use her own car or rent a car to go onan extended cross-country trip for two weeks during spring break. What costsabove are relevant in this decision?Note: You may select more than one answer. Single click the box with thequestion mark to produce a check mark for a correct answer and double click thebox with the question mark to empty the box for a wrong answer. Any boxes leftwith a question mark will be automatically graded as incorrect.? Variable operating costs? Depreciation? Automobile tax? License costs? Insurance costs

To compute the average cost per mile of owning and operating the car, we'll first calculate the…

Answered: 1. Kristen drove the car 26,000 miles…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which one of the following statements is false? Group of answer choices A.Bill drives 20 each way between his home to his office – 40 miles round trip each day. During the day he drives to a client site. He drives a total of 63 miles that day. He may deduct the cost of 43 miles. B.Commuting expenses may be deductible if you are transporting tools. C.A consultant works out of her home. She may deduct the cost of driving to a client’s place of business. D.The expenses of driving between your regular job and a second job are deductible.
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1.1 Consider the following costs of owning and operating a car. An $18,000 Fiat 500 Pop financed over 60 months at 4 percent interest means a monthly payment of $331.50. Insurance costs $120 a month regardless of how much you drive. The car gets 35 miles per gallon and uses regular-grade gasoline that costs $2.60 per gallon. Finally, suppose that wear and tear on the car costs about 20 cents a mile. Which costs are fixed, and which are variable? What is the marginal cost of a mile driven? In deciding whether to drive from Atlanta to Las Vegas (about 2,000 miles round-trip), which costs would you consider? Why?
Mike and BrettBrett are students at Berkeley College. They share an apartment that is owned by BrettBrett. BrettBrett is considering subscribing to an Internet provider that has the following packages available: Package Per Month A. Internet access $60 B. Phone services 15 C. Internet access + phone services 65 ... Question content area top right Part 1 MikeMike spends most of his time on the Internet ("everything can be found online now"). BrettBrett prefers to spend his time talking on the phone rather than using the Internet ("going online is a waste of time"). They agree that the purchase of the $ 65$65 total package is a "win dash win""win–win" situation. Requirements 1. Allocate the $ 65$65 between MikeMike and BrettBrett using (a) the stand-alone cost-allocation method, (b) the incremental cost-allocation method, and (c) the Shapley value method. 2. Which method would you recommend they use and why?
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REFLECTING Should Jill consider a payday loan to purchase the refrigerator? Explain. Hint APR means annual percent rate. F welding. He needs money 2. Jill is buying a new refrigerator. She cannot afford to pay cash. Should she use a credit card or get a personal loan? Justify your answer. 3. Liam, a taxi driver in Revelstoke, wants to buy a new taxi. He was approved for the loans in this chart. a) What should Liam think about when he chooses a loan? Choose a louh APR Loan secured personal loan auto loan 7.5% 5.5% b) Which loan should Liam choose? Explain why. Fixed payments for 4 yr 6 yr 4. Hannah says that using payday loans and cash advances on credit cards are bad choices for borrowing money. Do you agree or disagree? Explain.
How do you determine how much it will cost for Gas per year for the Honda Civic?
es Kristen Lu purchased a used automobile for $28,600 at the beginning of last year and incurred the following operating costs: Depreciation ($28,600 + 5 years) Insurance Garage rent Automobile tax and license Variable operating cost Relevain ry 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 $5,720. The car is kept in a garage for a monthly fee. Average fixed cost per mile Variable operating cost per mile Average cost per mile $ 5,720 $ 3,000 $ 1,500 $780 $ 0.11 per mile Required: 1. Kristen drove the car 22,000 miles last year. Compute the average cost per mile of owning and operating the car. (Round your answers to 2 decimal places.)
Christine Lynn travels from her home to a remote island. Her trip involves: car travel of 250 miles, air travel of 400 miles, and a boat ride of 75 miles. She is interested in calculating the average fuel cost per mile (per person) of her trip. Assume the fuel efficiency of car, air, and boat travel is 20, 0.20, and 2 miles per gallon, respectively, and that fuel cost per gallon is equal for all and is $3.00/gallon. She was alone in the car and among 180 people on the plane and 15 on the boat. What is the average fuel cost per mile, per person?
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Andy purchased a new drone last year for $1,500. He no longer uses the drone and wants to sell it. He currently values the drone at $400. Suppose Jeff wants to purchase a drone. His maximum willingness to pay for a drone is $700. Instructions: Enter your answers as a whole number. Suppose Andy and Jeff agree on a price of $500 for the drone. a. How much producer surplus will this transaction generate? $ b. How much consumer surplus will this transaction generate? 100 400 c. What will be the total surplus generated from this transaction? $ 90

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