Joyce Murphy runs a courier service in downtown Seattle She charges clients $0.40 per mile...
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Accounting
Joyce Murphy runs a courier service in downtown Seattle She charges clients $0.40 per mile driven. Joyce has determined that if she drives 3,000 miles in a month, her total operating cost is $985. If she drives 5,700 miles in a month, her total operating cost is $1,498 Joyce has used the high-low method to determine that her monthly cost equation is total monthly cost = $415 + $0.19 per mile driven Required: 1. Determine how many miles Joyce needs to drive to break even 2. Calculate Joyce's degree of operating leverage if she drives 5,900 miles 3. Suppose Joyce took a week off and her sales for the month decreased by 26 percent. Using the degree of operating leverage. calculate the effect this will have on her profit for that month
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