Fresno Home Oil Services Wants to Determine a Fuel Surcharge

Multiple Choice

Fresno Home Oil Services wants to determine a fuel surcharge to add to its customers' bills based on the number of miles driven to each area.It wants to separate the fixed and variable portion of the truck's operating costs so it has a better idea of how distance affects these costs.Fresno Home Oil Services has the following data available. $$\begin{array} { | l | c | c | } \hline \text { Month } & \text { Miles driven } & \text { Total operating costs } \\\hline \text { January } & 15,900 & \$ 9,000 \\\hline \text { February } & 17,300 & \$ 9,860 \\\hline \text { March } & 14,500 & \$ 8,600 \\\hline \text { April } & 16,100 & \$ 8,800 \\\hline \text { May } & 17,100 & \$ 8,600 \\\hline \text { June } & 15,500 & \$ 8,100 \\\hline\end{array}$$ Fresno Home Oil Services uses the high-low method to determine its operating cost equation and earns $0.50 per mile for 18,000 miles.
-What would its operating income (loss) be for a month if Fresno Home Oil Services prepared a contribution margin income statement for the month?

A) $ 900
B) ( $1,175)
C) $ 8,100
D) $ 9,000