Chico Kahlo purchased a car 1 year ago for $10,900.00. He drove it 13,890 miles and kept a record of his expenses. His variable costs were $1,908.00. His fixed costs for insurance and license were $800.00. He estimates the car’s present value at $8,652.00. What was Chico’s cost per mile for him to operate his car?
To find Chico's cost per mile for operating his car, we need to calculate the total cost of operating the car over the year and then divide it by the total miles driven.
First, we need to calculate the total annual cost by adding the fixed cost and the variable cost:
Total annual cost = Fixed cost + Variable cost
Total annual cost = $800 + $1,908
Total annual cost = $2,708
Next, we need to divide the total annual cost by the total miles driven to find the cost per mile:
Cost per mile = Total annual cost / Total miles driven
Cost per mile = $2,708 / 13,890
Cost per mile ≈ $0.195
Therefore, Chico's cost per mile to operate his car is approximately $0.195.