Accounting 5

Bethany Link delivers parts for several local auto parts stores. She charges clients $0.75 per mile driven. She has determined that if she drives 2,100 miles in a month, her average operating cost is $0.55 per mile. If Bethany drives 4,200 miles in a month, her average operating cost is $0.40 per mile.

Required:
a. Using the high-low method, determine Bethany’s variable and fixed operating cost components. (Round your cost per unit answer to 2 decimal place.)
1. variable cost per unit= ?
2. fixed cost= ?


b. Complete the contribution margin income statement for the business last month, when Bethany drove 2,400 miles. (Assume this falls within the relevant range of operations).

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