Assume russell drove 1370 miles last month without making

Reference no: EM13482288

Russell Preston delivers parts for several local auto parts stores. He charges clients 0.78 per mile driven. Russell has determined that if he drives 1,700 miles in a month, his average operating cost is $0.59 per mile. If he drives 4,500 miles in a month, his average operating cost is $0.40 per mile. Russell has used the high-low method to determine that his monthly cost equation is: total cost = $535.00 + $0.28 per mile.

1) Determine how many miles Russell needs to drive to break even.Break-Even Miles: _________

2) Assume Russell drove 1,370 miles last month. Without making any additional calculations, determine whether he earned a profit or a loss last month.Loss or Profit?

3) Determine how many miles Russell must drive to earn $1,075.00 in profit.Target Miles: __________

4) Prepare a contribution margin income statement assuming Russell drove 1,370 miles last month.(Enter your answers rounded to 2 decimal places.)

5) Use the above information to calculate Russell's degree of operating leverage. (Round your answer to the 2 decimal places.)Degree of Operating Leverage: _______?

Reference no: EM13482288

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