Chapter 12, Problem 12.9E

To determine

1.

Concept Introduction:

Variable costs:

Variable costs can be defined the cost or the expenses that change with the change in the level of output.

Fixed costs:

Fixed costs can be defined as the cost or the expenses that do not change with the change in the level of output.

Total costs:

The total costs can be defined as the sum of total variable costs and total fixed costs.

To calculate:

Total cost for driving 1,529 miles

To determine

2.

Concept Introduction:

Variable costs:

Variable costs can be defined the cost or the expenses that change with the change in the level of output.

Fixed costs:

Fixed costs can be defined as the cost or the expenses that do not change with the change in the level of output.

Total costs:

The total costs can be defined as the sum of total variable costs and total fixed costs.

Whether it would be meaningful to calculate an estimated average cost for a typical 1,400 miles per month