Estimating costs based on behavior patterns Terry estimates that the costs of insurance, license, and depreciation to operate his car total $430 per month and that the gas, oil, and maintenance costs are 80 cents per mile. Terry also estimates that, on average, he drives his car 2,000 miles per month. Required:a. How much cost would Terry expect to incur during July if he drove the car 2,342 miles?b. Would it be meaningful for Terry to calculate an estimated average cost per mile for a typical 2,000-mile month? Explain your answer.
Estimating costs based on behavior patterns Terry estimates that the costs of insurance, license, and depreciation to operate his car total $430 per month and that the gas, oil, and maintenance costs are 80 cents per mile. Terry also estimates that, on average, he drives his car 2,000 miles per month. Required:a. How much cost would Terry expect to incur during July if he drove the car 2,342 miles?b. Would it be meaningful for Terry to calculate an estimated average cost per mile for a typical 2,000-mile month? Explain your answer.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Estimating costs based on behavior patterns Terry estimates that the costs of insurance, license, and
Required:
a. How much cost would Terry expect to incur during July if he drove the car 2,342 miles?
b. Would it be meaningful for Terry to calculate an estimated average cost per mile for a typical 2,000-mile month? Explain your answer.
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