Chestnut Ridge N'Y'C': 60 mi' r't'

1
Carpooling Example

• Chestnut Ridge - N.Y.C. 60 mi. r.t.
• Tenafly, NJ - N.Y.C. 30 mi. r.t.
• 150 commutes per year
• Gas 2 per gallon 20 miles per gal
• Total miles driven per year 18,000

2
Carpooling
Direct Costs Gasoline 60 miles round trip x 150
days/yr 9,000 miles ? 20 miles/gal 450
gallons x 2.00 900 per year Parking 10
0 per mo. Speeding Tickets driver pays
3
Carpooling
Overhead Costs Insurance 1,200 per
year Repairs Maintenance 800 per
year Depreciation Expense 0
Allocation base might be miles driven. 9,000
miles driven on the commute (60 mi. r.t. x 150
days) 18,000 miles driven in total, each year
4
Carpooling
Overhead Costs Insurance 1,200 per
year Repairs Maintenance 800 per
year Depreciation Expense 0
Allocation rate for insurance Overhead costs ?
total miles driven 1,200 ? 18,000 0.067
per mile
Applying overhead insurance costs to the commute
0.067 per mile x 9,000 miles 600.
5
COMMUTE COSTS

• Gas
• Bridge Toll
• Parking
• Insurance
• Maintenance
• Traffic Tickets
• Opportunity Costs

• Variable, Indirect
• Variable, Direct
• Fixed, Direct
• Fixed, Indirect
• Mixed, Indirect

6
ALLOCATE GAS COSTS
Total Annual Gas Expense Total Annual Miles Driven
Gasoline Cost per mile This is the overhead
rate for applying gas expense to my
commute. Multiply this rate/mile by the 4,500
shared miles of the commute to derive the shared
gas expense.