5.5: Accounting in the Headlines- Costs

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Are the costs of owning a car fixed, variable, or mixed?

According to a recent news article in the Wall Street Journal (“Mercedes or Ford, It Costs a Lot More Than You Think,” Wall Street Journal, Sunday Journal, March 15, 2014), the average consumer spends more than $760 a month on his/her vehicle and related expenses.

Purchase price of the car
Finance charges on car loan
Gas
Oil changes
Routine maintenance
Tires
Insurance
License plate/registration
SiriusXM Radio subscription cost
Car washes
Garage/parking
Parking tickets
Speeding tickets
Value of car owner’s time spent commuting

Questions

Which of the costs above would most likely be variable with respect to the number of miles the car owner drives?
Which of the costs above would most likely be fixed with respect to the number of miles the car owner drives?
Which of the costs above would most likely be mixed with respect to the number of miles the car owner drives?

Are the costs of owning a car fixed, variable, or mixed?. Authored by: Dr. Wendy Tietz, CPA, CMA, CGMA . Located at: http://www.accountingintheheadlines.com. License: CC BY-NC: Attribution-NonCommercial

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