Marggrette runs a courier service in downtown Seattle. She charges clients $0.60 per mile driven....
50.1K
Verified Solution
Link Copied!
Question
Accounting
Marggrette runs a courier service in downtown Seattle. She charges clients $0.60 per mile driven. Marggrette has determined that if she drives 3,200 miles in a month, her total operating cost is $1,045. If she drives 5,400 miles in a month, her total operating cost is $1,485. Joyce has used the high-low method to determine that her monthly cost equation is total monthly cost = $405 + $0.20 per mile driven.
Required:
Determine how many miles Marggrette needs to drive to break even.
Calculate Marggrette's degree of operating leverage if she drives 5,600 miles.
Suppose Marggrette took a week off and her sales for the month decreased by 23 percent. Using the degree of operating leverage, calculate the effect this will have on her profit for that month.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
