Question

6. value: 1.25 points Bill has just returned from a duck hunting trip. He has brought home eight ducks. Bill's friend, John, disapproves of duck hunting, and to discourage Bill from further hunting, John has presented him with the following cost estimate per duck: $237.50 32.00 20.00 Camper and equipment: Cost, $19,000; usable for eight seasons; 10 hunting trips per season Travel expense (pickup truck): 100 miles at $0.32 per mile (gas, oil, and tires—$0.20 per mile; depreciation and insurance $0.12 per mile) Shotgun shells (two boxes) Boat: Cost, $2,400, usable for eight seasons; 10 hunting trips per season Hunting license: Cost, $70 for the season; 10 hunting trips per season Money lost playing poker: Loss, $38 (Bill plays poker every weekend) Bottle of whiskey: Cost, $20 (used to ward off the cold) 30.00 7.00 38.00 20.00 Total cost $384.50 Cost per duck ($384.50 + 8 ducks) $48.06 Required: 1. Assuming that 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? Total 2. Suppose that Bill gets lucky on his next hunting trip and shoots 10 ducks in the amount of time it took him to shoot 8 ducks on his last trip. How much would it have cost him to shoot the last two ducks? Cost of last two ducks

Answer 1

Page: No 0 Answer © Relevante cortos por hurting hip $0.20 per mile travel expense a = toomiles & $20 Amount $20 . Particular Travel expense shotgun shells One bottle of whiskey - Total $20 $20 $60 * .: Relevant costs = $ 60 por hunting buip In this case, Campen and equipment cost are sunk ensf. Therefore These are Borelevant coop cost of depreciation & insurance.conds are Evrelevant costas because there are unawoidable fixed costs cost of boat is irelevant cost que to it is sunk cost * 1 *

Page No ③ * Money lost while playing poker is ioclevant to decision making * Hunting license fees is also an indemant coof , due to it is unavoidable fixed cook & According to the costs incurred are on trip basss and not on per- decko- basis, the relevant corks incurred to shoot the ducks semain same and shooting 8 docks or lo ducks dons not affect the costos incurred. ". The cost of last two ducks is so - cost of last two docks = 40