Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall

Exercise 7

Estimating costs based on behavior patterns Larry estimates that the costs of insurance, license, and depreciation to operate his car total $320 per month and that the gas, oil, and maintenance costs are 14 cents per mile. Larry also estimates that, on average, he drives his car 1,400 miles per month.
Required:
a. How much cost would Larry expect to incur during April if he drove the car 1,529 miles?
b. Would it be meaningful for Larry to calculate an estimated average cost per mile for a typical 1,400-mile month? Explain your answer.