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Russell Preston delivers parts for several local auto parts stores. He charges clients $0.75 per...

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Accounting

image Russell Preston delivers parts for several local auto parts stores. He charges clients $0.75 per mile driven. Russell has determined that if he drives 3,240 miles in a month, his average operating cost is $0.55 per mile. If he drives 4,320 miles in a month, his average operating cost is $0.50 per mile. Russell has used the high-low method to determine that his monthly cost equation is total cost =$648 +$0.35 per mile. Required: 1. Determine how many miles Russell needs to drive to break even. 2. Assume Russell drove 1,920 miles last month. Without making any additional calculations, determine whether he earned a profit or a loss last month. 3. Determine how many miles Russell must drive to earn $1,000 in profit. 4. a. Prepare a contribution margin income statement assuming Russell drove 1,920 miles last month. b. Use the information provided in Req 4a to calculate Russell's degree of operating leverage

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