Question

Jackson purchases a used car a year ago. He drove 8,564 miles during the year and kept a record of all his expenses. He figured the annual variable cost to be $1,342.90. His annual fixed costs were $905.44. Find the cost per mile.

Answer 1

Jackson's cost per mile to operate his used car for a year is approximately $0.2626. This is computed by adding together his annual variable costs and annual fixed costs and then dividing by the total miles driven during the year.

Step-by-step explanation:

The cost per mile that Jackson spent on his used car is calculated by adding the annual variable costs to the annual fixed costs and then dividing by the total miles driven. Jackson's total annual cost is the sum of his annual variable cost ($1,342.90) and his annual fixed cost ($905.44). This gives us:

Total annual cost = Variable cost + Fixed cost

Total annual cost = $1,342.90 + $905.44

Total annual cost = $2,248.34

Next, to find the cost per mile, we divide the total annual cost by the total miles driven:

Cost per mile = Total annual cost / Total miles driven

Cost per mile = $2,248.34 / 8,564 miles

Cost per mile = $0.2626 (rounded to four decimal places)

So, the cost per mile for Jackson to operate his used car for the year is approximately $0.2626.