Question

From the following information, determine operating cost per mile. Choose the right answer. Cost of car = $5,000.00 Market value after 1 year = $3,800 Cost of gas and oil = $750.00 Repairs/Maintenance = $250.00 Insurance = $300.00 Miles driven = 17,500 Cost per mile = $

Answer 1

Cost per mile is 0.143.

Explanation:

Cost of car = $5,000

Market value after 1 year = $3,800

Depreciation amount =
`5000-3800=1200`

Cost of gas and oil = $750

Repairs/Maintenance = $250

Insurance = $300

Total costing of the car becomes=
`1200+750+250+300=2500`

Miles driven = 17,500

To find the cost per mile, we will divide the total costing by number of miles driven.

`(2500)/(17500)= 0.1428`≈ 0.143

Hence, cost per mile is 0.143.

Answer 2

cost per mile = $ 0.143

Explanation:

Market value of car after 1 year = $3,800

Loss = $5,000.00 - $3,800

= $ 1200

Total cost of the car = 1200 + 750 + 250 + 300

= 2500

cost per mile = 2500 /17500 = 0.143