do part B Do not give answer in image Cost-volume-profit analysis can also be used in making personal financial decisions. For example, the purchase of a new car is one ofyour biggest personal expenditures. It is important that you carefully analyze your options.Suppose that you are considering the purchase of a hybrid vehicle. Let's assume the following facts. The hybrid will initially cost anadditional $5,000 above the cost of a traditional vehicle. On average, the hybrid will get 60 miles per gallon of gas, and the traditionalcar will get 30 miles per gallon. Also, assume that the cost of gas is $1.20 per gallon.Using the facts above, answer the following questions.(a)Your answer is correct.For gasoline, what is the unit variable cost of going one mile in the hybrid car? What is the unit variable cost of going one mile inthe traditional car? (Round answers to 2 decimal places, e.g. 0.25.)Variable gasoline costHybrid car0.02$Traditional car0.04 (b)Using the information in above part, if "miles" is your unit of measure, what is the differential between the hybrid vehicle and thetraditional vehicle? That is, express the variable cost savings on a per-mile basis. (Round answer to 2 decimal places, e.g. 0.25.)Savings per mile$CACAC

Variable costs are costs that vary with the change in the level of output.The contribution margin…

Answered: Cost-volume-profit analysis can also be…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5PA: Kylies Cookies is considering the purchase of a larger oven that will cost $2,200 and will increase...

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