Question

Tom drives a truck. His regular trip is a distance of 280 km. He drives at an average speed of 80 km/h. For safety reasons Tom’s boss puts a speed limiter on his truck. This reduces Tom’s average speed by 10 km/h. The total operating cost for the truck is $400 000 per year. The percentage breakdown of this total amount was: 40%: Fixed costs (insurance, registration, wages) 30%: Fuel 20%: Finance 10%: Maintenance (service, repairs, tyres) Suppose the fuel price increases from $1.50 to $1.60 per litre. How much does this add to the total operating cost per year?

Answer 1

Cost of fuel = 30% of $400 000 = 30/100 x 400000 = $120 000

Fuel amount = $120 000/$1.5 = 80 000 liters
new cost of fuel = 80000 x $1.6 = $144 000

increase in cost = 144000 - 120000 = $24000

So the increase in petrol price increases the operating cost by $24000

Answer 2

Your answer will be So the increase in petrol price increases the operating cost by $24000

hope this helped! haha have a great one, :) x