**Scenario Analysis: Calculating Bridget's Travel Costs**Bridget Youhzi is preparing to attend a scholarship dinner at her alma mater's accounting honor society, where she has been invited to make a presentation. Her firm supports her attendance, hoping it will attract new employees. The university hosting the event is 196 miles from Bridget's office. The dinner begins at 5:00 p.m., and she needs to leave by 1:00 p.m. to arrive on time.### Driving Option- **Reimbursement Rate**: $0.50 per mile- **Round-Trip Distance**: 392 miles (196 miles each way)- **Travel Time**: 4 hours each way- **Arrival Time at the Dinner**: 5:00 p.m.- **Departure Time from Office**: 1:00 p.m.- **Meal Time**: 9:00 p.m.- **Overnight Stay**: Allowed if travel time is 4+ hours- **Accommodation Cost**: $101 at a nearby student-run inn and conference center### Flying Option- **Flight Time**: Departs at 3:00 p.m.- **Flight Cost**: $300 for a round-trip ticket- **Car Rental**: $39 per day- **Airport Parking**: $25 for the day- **Company Per Diem for Incidentals**: $35 per day if out of town for 6+ hours### Decision-MakingBridget must decide whether driving or flying is more economical, factoring in the costs associated with each option. The relevant cost considerations revolve around travel, accommodation, and incidentals to determine which mode of transportation offers better value.**Question**: What is the relevant cost of driving? (Enter your calculation and conclusions based on the details outlined above.)

Relevant costs are the costs associated with the project. The organization must only consider the cost to be relevant and should not consider the cost if it is not relevant to the project company.The cost of driving= is $297 Explanation- The calculation of the total cost of driving is as follows- Excel snip-

Business

Accounting

student-run inn and conference center across the street from campus that charges $101 per night. Instead of driving, she could catch a 3:00 p.m. flight that has a round-trip fare of $300. Flying would require her to rent a car for $39 per day and pay an airport parking fee of $25 for the day. The company pays a per diem of $35 for incidentals if the employee spends at least six hours out of town. (The per diem would be for one 24-hour period for either flying or driving.) As a manager, Bridget is responsible for recruiting within a budget and wants to determine which is more economical. What is the relevant cost of driving?

student-run inn and conference center across the street from campus that charges $101 per night. Instead of driving, she could catch a 3:00 p.m. flight that has a round-trip fare of $300. Flying would require her to rent a car for $39 per day and pay an airport parking fee of $25 for the day. The company pays a per diem of $35 for incidentals if the employee spends at least six hours out of town. (The per diem would be for one 24-hour period for either flying or driving.) As a manager, Bridget is responsible for recruiting within a budget and wants to determine which is more economical. What is the relevant cost of driving?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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