Question

Zoom in on numbers

Bethany Link delivers parts for several local auto parts stores She charges clients $2 93 per mile driven She has determined that f she drives 2,600 miles in a month, her average operating cost s $2 73 per mle. If Bethany drives 5.200 miles in a month, her average operating cost is $2 10 per mle Required: 1. Using the high-low method, determine Bethany's vanable and fhxed operating cost components. (Round your cost per unit answer to 2 decimal places.) ariable Cost per Mile Driven Fixed Cost si (Round your 2. С plete the con un margin nco mesta er entfor the busness last month when Bera y dove 2860 ntermediate calculations to 2 decimal places and final answers to the nearest whole number) des (Assure his tals went e reevant an e oe era Contribution Margin Income Statement For the Last Month Contribution Margin Net Operating Income

Answer 1

	Service Charge	2.93
			Av Cost Per Mile	Total Cost
	Low Level	2600	2.73	7098
	High Level	5200	2.10	10920
	Variable Cost Per Mile:
	Change in Cost/Change in Activity Level
	(10920-7098)/(5200-2600)
	1.47	Per Mile
	At 2600 Level:
	Total Cost	7098
	Variable Cost	3822	(1.47*2600)
	Fixed Cost	3276
1	Variable Cost Per Mile	1.47
	Fixed Cost	3276
2	BETHANY LINK
	Contribution Margin Income Statement
	For the Last Month
	Service Revenue	8380	(2.93*2860)
	Less: Variable Cost	4204	(1.47*2860)
	Contribution Margin	4176
	Less: Fixed Costs	3276
	Net Operating Income	900