Kristen Lu purchased a used automobile for $8,350 at the beginning of last year and...
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Accounting
Kristen Lu purchased a used automobile for $8,350 at the beginning of last year and incurred the following operating costs:
Depreciation ($8,350 5 years)
$
1,670
Insurance
$
900
Garage rent
$
500
Automobile tax and license
$
230
Variable operating cost
$
0.08
per mile
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 $1,670. The car is kept in a garage for a monthly fee.
Required:
1. Kristen drove the car 11,000 miles last year. Compute the average cost per mile of owning and operating the car. (Round your answers to 2 decimal places.)
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