Kristen Lu purchased a used automobile for $9,200 at the beginning of last year and incurred the following operating costs: Depreciation ($9,200 ÷ 5 years) $ 1,840
Insurance $ 1,000
Garage rent $ 500
Automobile tax and license $ 260
Variable operating cost $ 0.12 per mile

The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates that, at her current rate of usage, the car will have zero resale value in five years, so the annual straight-line depreciation is $1,840. The car is kept in a garage for a monthly fee.