Kristen Lu purchascu a used automobile for $8,000 at the beginning of last year and incurred the following operating costs: Depreciation ($8,000 ÷ 5 years) Insurance Garage rent Automobile tax and license Variable operating cost $1,600 $1,200 $360 $40 $0.14 per mile The variable operating cost consists of gasoline, oil, tires, mainance, 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 $1,600. The car is kept in a garage for a monthly fee. Required: 1. Kristen drove the car 10,000 miles last year. Compute the average cost per mile of owning and operating the car. 2. Kristen is unsure about whether she should use her own car or rent a car to go on an extended cross-country trip for two

Kristen Lu purchascu a used automobile for $8,000 at the beginning of last year and incurred the following operating costs: Depreciation ($8,000 ÷ 5 years) Insurance Garage rent Automobile tax and license Variable operating cost $1,600 $1,200 $360 $40 $0.14 per mile The variable operating cost consists of gasoline, oil, tires, mainance, 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 $1,600. The car is kept in a garage for a monthly fee. Required: 1. Kristen drove the car 10,000 miles last year. Compute the average cost per mile of owning and operating the car. 2. Kristen is unsure about whether she should use her own car or rent a car to go on an extended cross-country trip for two

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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