Unit F: Finance

Summary


Fixed and Variable Costs

    • Fixed costs are costs that do not vary or change from month to month. Fixed costs must be paid regardless of how much the vehicle is used.
    • Variable costs are unpredictable costs that change in amount or frequency.
    • Examples of fixed costs and variable costs are recorded in the table.

      Fixed Costs
      		 Variable Costs
      registration fuel
      monthly loan or lease payments
      		 oil changes
      insurance maintenance and repairs
      driver's license
      		 parking
      tires
      towing


    Fuel Consumption

    • Fuel consumption is recorded in litres per 100 km (L/100 km).
    • The cost of gas to travel a certain distance is calculated using the formula

      cost = fuel price × fuel consumption × distance

      where:
      cost is in dollars ($)
      fuel price is in $/L
      fuel consumption is in litres per 100 km travelled (L/100 km)
      distance is in kilometres

    Calculating the Cost of Operating a Vehicle

    • The total cost of operating a vehicle is the sum of the fixed costs and variable costs.

      total cost = fixed costs + variable costs