Based on the data provided here, calculate the items requested: annual depreciation $ 2,500 annual mileage 14,160 current year's loan interest $ 690 miles per gallon 24 insurance $ 800 license and registration fees $ 105 average gasoline price $ 3.50 per gallon oil changes/repairs $ 610 parking/tolls $ 580

a. calculate total annual operating cost of the motor vehicle. total variable cost $

Total annual operating cost of the motor vehicle is $7,350 and total variable cost is $3,255

Explanation:

annual depreciation $ 2,500

annual mileage 14,160

current year's loan interest $ 690

miles per gallon 24

insurance $ 800

license and registration fees $ 105

average gasoline price $ 3.50 per gallon

oil changes/repairs $ 610

parking/tolls $ 580

The total cost of operating the vehicle will be sum of fixed and variable costs.

Fixed Cost:

Depreciation: 2,500

Loan Interest: 690

Insurance: 800

License & Registration Fees: 105

Total Fixed Cost: 2,500 + 690 + 800 + 105 = $4,095

Variable Cost:

Parking Tolls: 580

Gasoline: 2,065 (Total miles/Miles Gallon=Total Gallons; 14,160/24=

590 Gallons, total gallons x cost/gallon = total gasoline cost; 590 x 3.50)

Oil Change Repairs = 610

Total Variable cost: 580 + 2,065 + 610 = $3,255

Total cost of operating motor vehicle:

Fixed + Variable: $4,095 + $3,255 = $7,350

total operating cost = $7350 variable cost = $3255

Explanation:

Annual depreciation = $2500

Annual mileage = 14160

current year loan interest = $690

miles per gallon = 24

insurance = $800

license and registration = $105

average gasoline price = $3.5 per gallon

oil changes/repairs = $610

parking / toll $580

The total annual operating cost = total fixed cost + total variable cost

total fixed cost = annual depreciation + loan interest + insurance + license

= $2500 + $690 + $800 + $105 = $4095

variable cost = parking + oil changes/repairs + gasoline price

gasoline price = (annual mileage / miles per gallon) * average gasoline price

= (14160/24) * $3.5 = $2065

back to variable cost = $580 + $610 + $2065 = $3255

therefore total annual operating cost = $4095 + $3255 = $7350