Russell Preston delivers parts for several local auto parts stores. He charges clients $ per mile driven. Russell has determined that if he drives miles in a month, his average operating cost is $ per mile. If he drives miles in a month, his average operating cost is $ per mile. Russell has used the highlow method to determine that his monthly cost equation is total cost $$ per mile.
Required:
Determine how many miles Russell needs to drive to break even.
Assume Russell drove miles last month. Without making any additional calculations, determine whether he earned a profit or a loss last month.
Determine how many miles Russell must drive to earn $ in profit.
a Prepare a contribution margin income statement assuming Russell drove miles last month.
b Use the information provided in Req a to calculate Russell's degree of operating leverage.
Complete this question by entering your answers in the tabs below.
Req
Determine how many miles Russell needs to drive to break even.
Note: Do not round your intermediate calculations.
BreakEven Miles
Miles
