The Inn occasionally hires Maria Sostenuto, a local pianist, to entertain the guests during theevening while they chat by the fireplace in the Grand Room. Maria charges $300 perapprearance plus $30 per hour.1. If Maria plays for three hours, what would be:the total cost to the Inn?the average cost per hour?2. If the Inn manager wants Maria to stay for a fourth hour, what would be:the cost of the fourth hour (the marginal cost)?the total cost to the Inn?the average cost per hour?3. Explain why the average cost is an unimportant calculation in this situation.

The Inn occasionally hires Maria Sostenuto, a local pianist, to entertain the guests during theevening while they chat by the fireplace in the Grand Room. Maria charges $300 perapprearance plus $30 per hour.1. If Maria plays for three hours, what would be:the total cost to the Inn?the average cost per hour?2. If the Inn manager wants Maria to stay for a fourth hour, what would be:the cost of the fourth hour (the marginal cost)?the total cost to the Inn?the average cost per hour?3. Explain why the average cost is an unimportant calculation in this situation.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 16E

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