Question

Global Corporation uses trucks to transport bottles from the warehouse to different retail outlets. Gasoline costs are $0.26per mile driven. Insurance costs are $6,500 per year. Calculate the total costs and the cost per mile for gasoline and insurance if the truck is driven​ (a)18,000 miles per year or​ (b)36,000miles per year. ​(Round the cost per mile to the nearest​ cent, $X.XX.)

	(a) Driven 18,000 miles	(b) Driven 36,000 miles
Total costs
Cost per mile

Answer 1

Gasoline cost per mile = $0.26

Annual insurance cost = $6,500

total cost of 18,000 miles = Miles driven x Gasoline cost per mile + Annual insurance cost

= 18,000 x 0.26 + 6,500

= 4,680+6,500

= $11,180

Total cost of 36,000 miles = Miles driven x Gasoline cost per mile + Annual insurance cost

= 36,000 x 0.26 + 6,500

= 9,360+6,500

= $15,860

	(a) Driven 18,000 miles	(b) Driven 36,000 miles
Total costs	$11,180	$15,860
Cost per mile	11,180/18,000 = $0.62	15,860/18,000 =$ 0.44

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