1. 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 Carpooling Example

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:=$100 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.”