Camper and equipment: Cost, $12,000; usable for eight seasons; 10 hunting trips per season Travel expense (pickup truck): 100 miles at $0.31 per mile (gas, oil, and tires-$0.21 per mile; depreciation and insurance-$0.10 per mile) Shotgun shells (two boxes per hunting trip). Boat: $150 ...... 31 20 Cost, $2,320, usable for eight seasons; 10 hunting trips per season 29 Hunting license: Cost, $30 for the season; 10 hunting trips per season Money lost playing poker: Loss, $24 (Bill plays poker every weekend whether he goes hunting or stays at home) . Bottle of whiskey: Cost, $15 per hunting trip (used to ward off the cold) 24 15 ... Total cost $272 ...... Cost per duck ($272 + 8 ducks) $34 ....
Camper and equipment: Cost, $12,000; usable for eight seasons; 10 hunting trips per season Travel expense (pickup truck): 100 miles at $0.31 per mile (gas, oil, and tires-$0.21 per mile; depreciation and insurance-$0.10 per mile) Shotgun shells (two boxes per hunting trip). Boat: $150 ...... 31 20 Cost, $2,320, usable for eight seasons; 10 hunting trips per season 29 Hunting license: Cost, $30 for the season; 10 hunting trips per season Money lost playing poker: Loss, $24 (Bill plays poker every weekend whether he goes hunting or stays at home) . Bottle of whiskey: Cost, $15 per hunting trip (used to ward off the cold) 24 15 ... Total cost $272 ...... Cost per duck ($272 + 8 ducks) $34 ....
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Identification of Relevant Costs
Bill has just returned from a duck hunting trip. He brought home eight ducks. Bill’s friend, John, disapproves of duck hunting, and to discourage Bill from further hunting, John presented him with the following cost estimate per duck:
Required:
1. Assuming the duck hunting trip Bill has just completed is typical, what costs are relevant to a decision as to whether Bill should go duck hunting again this season?
2. Suppose Bill gets lucky on his next hunting trip and shoots 10 ducks using the same amount of shotgun shells he used on his previous hunting trip to hag 8 ducks. How much would it have cost him to shoot the last two ducks? Explain.
3. Which costs are relevant in a decision of whether Bill should give up hunting? Explain.
Transcribed Image Text:Camper and equipment:
Cost, $12,000; usable for eight seasons; 10 hunting trips per season
Travel expense (pickup truck):
100 miles at $0.31 per mile (gas, oil, and tires-$0.21 per mile; depreciation
and insurance-$0.10 per mile)
Shotgun shells (two boxes per hunting trip).
Boat:
$150
......
31
20
Cost, $2,320, usable for eight seasons; 10 hunting trips per season
29
Hunting license:
Cost, $30 for the season; 10 hunting trips per season
Money lost playing poker:
Loss, $24 (Bill plays poker every weekend whether he goes hunting
or stays at home) .
Bottle of whiskey:
Cost, $15 per hunting trip (used to ward off the cold)
24
15
...
Total cost
$272
......
Cost per duck ($272 + 8 ducks)
$34
....
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