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8 April, 09:33

EA7.

LO 2.2Western Trucking operates a fleet of delivery trucks. The fixed expenses to operate the fleet are $79,900 in March and rose to $93,120 in April. It costs Western Trucking $0.15 per mile in variable costs. In March, the delivery trucks were driven a total of 85,000 miles, and in April, they were driven a total of 96,000 miles. Using this information, answer the following:

What were the total costs to operate the fleet in March and April, respectively?

What were the cost per mile to operate the fleet in March and April, respectively?

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Answers (1)
  1. 8 April, 13:03
    0
    (a) $92,650; $107,520

    (b) $1.09 per mile; $1.12 per mile

    Explanation:

    (a) March:

    Total cost to operate the aircraft:

    = Fixed cost + Variable cost

    = $79,900 + ($0.15 * 85,000 miles)

    = $79,900 + $12,750

    = $92,650

    April:

    Total cost to operate the aircraft:

    = Fixed cost + Variable cost

    = $93,120 + ($0.15 * 96,000 miles)

    = $93,120 + $14,400

    = $107,520

    (b)

    Total costs per mile to operate the fleet in March:

    = Total cost in March : Miles flew in March

    = $92,650 : 85,000

    = $1.09 per mile

    Total costs per mile to operate the fleet in April:

    = Total cost in April : Miles flew in April

    = $107,520 : 96,000

    = $1.12 per mile
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