1Bridget Youhzi works for a large firm. Her alma mater has asked her to make a presentation to the upcoming accounting honor society’s annual scholarship dinner. Her firm supports the presentation because it hopes to recruit more excellent employees like Bridget. The university is 196 miles from her office. In order to get to the dinner by 5:00 p.m., she will need to leave work at 1:00 p.m. She can drive her personal car and be reimbursed $0.50 per mile. The dinner ends at 9:00 p.m. Company policy allows her to spend the night if the return trip is four hours or more. There is a 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.   Use the information provided to answer these questions.   What is the total amount of expenses Bridget would include on her expense report if she drives? What is the total amount of expenses she would include on her expense report if she flies? What is the relevant cost of driving? What is the relevant cost of flying? What is the differential cost of flying over driving? What other factors should Bridget consider in her decision between driving and flying?

Question

1Bridget Youhzi works for a large firm. Her alma mater has asked her to make a presentation to the upcoming accounting honor society’s annual scholarship dinner. Her firm supports the presentation because it hopes to recruit more excellent employees like Bridget. The university is 196 miles from her office. In order to get to the dinner by 5:00 p.m., she will need to leave work at 1:00 p.m. She can drive her personal car and be reimbursed $0.50 per mile. The dinner ends at 9:00 p.m. Company policy allows her to spend the night if the return trip is four hours or more. There is a 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.

 

Use the information provided to answer these questions.

 

What is the total amount of expenses Bridget would include on her expense report if she drives?

What is the total amount of expenses she would include on her expense report if she flies?

What is the relevant cost of driving?

What is the relevant cost of flying?

What is the differential cost of flying over driving?

What other factors should Bridget consider in her decision between driving and flying?

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Cost Accounting

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: (Learning Objectives 2, 3, 4: Reconstruct transactions from the financial statements)Parker Networki...

A: Click to see the answer

Q: The internal control procedures in Philips Company make the following provisions. Identify the princ...

A: Employees have physical custody of assets but do not have access to accounting records – Responsibil...

Q: ProBuilder reports merchandise sales of $50,000 and cost of merchandise sales of $20,000 in its firs...

A: Journal entry:   Journal is the book of original entry whereby all the financial transactions are re...

Q: Fleet Sports purchased a production machine with a cost of $180,000 at the beginning of 2019. Transp...

A: Depreciation:   Depreciation refers to the reduction in the monetary value of a fixed asset due to ...

Q: Scott Equine Supplies had the following beginning inventory, net purchases, net sales,and gross prof...

A: Definition: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a re...

Q: Wright Company’s Cash account shows a $27,500 debit balance and its bank statement shows $25,800 on ...

A: Bank Reconciliation is the statement by which bank balance as per cash book is matched with bank bal...

Q: Cutoff tests designed to detect valid sales that occurred before the end of the year but havebeen re...

A: Answer:   Option b.

Q: PRS Corporation uses one of the cash conversion models to manage its cash account. Recently, someone...

A: Miller-Orr Model:   Miller-Orr Mode; is used to find out the optimum cash balance level which subse...

Q: What is meant by GAAP? Why should companies follow GAAP in reporting to external users?

A: Generally Accepted Accounting Principles (GAAP): Generally Accepted Accounting Principles are the ge...

Q: Generating a Flexible Budget; Spreadsheet Application Crane Corporation’s master (static)budget for ...

A: Flexible Budget: The flexible budget is also known as the 'Variable budget' is a useful accounting t...

Q: Explain how a business can earn a positive gross profit on its sales and still have a net loss.

A: Gross profit: It can be defined as the difference between the cost of goods sold and the net sales r...

Q: (Learning Objectives 2, 6: Account for stock issuance; report stockholders’equity) The partners who ...

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. Th...

Q: Part-1 of 3 Kramer Company, makes 3,000 units every year of a component called Axial Tap for use in ...

A: Given    :            Kramer Company makes 3000 units p.a. of Axial Tap whose cost as below:        ...

Q: For the current year, Parker Games has the following inventory transactions related to its tradition...

A: 1.

Q: Define estimated useful life

A: Definition: Assets: These are the resources owned and controlled by business and used to produce ben...

Q: A home improvement store, like Lowe’s, carries the following items:Required:1. Compute the total cos...

A: Inventory valuation refers to monetary amounts that related with the merchandise in the stock toward...

Q: Balance Sheet Assignment Overview The main purpose of this Module is to review the balance sheet in ...

A: We will answer only first three sub-parts of the question as it is not specified which sub-part is t...

Q: Once a month, the sales department sends sales invoices to the accounting department to be recorded....

A: Internal control:   Internal control is a process which ensures continuous reliability of accomplis...

Q: Assume that XYZ catering services paid $144,000 for equipment with a16 ​-year life and zero expected...

A: Straight Line Depreciation Method It is method for calculating how much a particular fixed asset dep...

Q: Organic Food Co.’s Cash account shows a $5,500 debit balance and its bank statement shows $5,160 on ...

A: Bank reconciliation statement:   Bank reconciliation statement is a report that summarizes the banki...

Q: The Balcar Company’s auditors are developing an audit plan to review the company’s systems developme...

A: Internal Controls: Internal controls are the controls established within an organization to check er...

Q: he following data are given for Bahia Company: Budgeted production 1,032 units Actual productio...

A: Variance: Variance refers to the difference level in the actual cost incurred and standard cost. The...

Q: Full vs. Variable Costing Security Technology Inc. (STI) is a manufacturer of an electroniccontrol s...

A: Absorption costing: Under this type of costing all Production costs are calculated on the basis of t...

Q: Valeri is opening a hair salon, but she does not know whatbusiness form it should take. What can you...

A: In a sole proprietorship, you have complete control over the business because its entirely yours. Th...

Q: (Learning Objectives 1, 2: Apply GAAP for proper revenue recognition; accountfor sales returns and a...

A: The journal entries are as follows:

Q: Consider each situation independently and describe the audit opinion that should be given and explai...

A: a. Qualified Report Reason: The method of estimating bad debts is not as per the accounting policies...

Q: A.                 Moneague Wholesale Ltd.  Statement of Financial Position as at Dec. 31, 2019 Asse...

A: i. Working capital is the capital required by a business to run its day-to-day operations. It can be...

Q: A machine costs $180,000 and will have an eight-year life, a $20,000 salvage value, and straight-lin...

A: Accounting rate of return (ARR) for an investment can be calculated as follows:-

Q: Home Furnishings reports inventory using the lower of cost and net realizable value (NRV). Below is ...

A: Total cost recorded cost of ending inventory before any adjustments = (200 x $85) + (50 x $400) = $1...

Q: Prepare journal entries for the following credit card sales transactions (the company uses the perpe...

A: 1.

Q: Learning Objective 3: Purchase inventory, accrue interest, and pay a short-termnote) On August 1, 20...

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...

Q: S3-9. (Learning Objective 3: Adjust the accounts for interest expense) Trent Restaurantborrowed $110...

A: Given: The Trent Restaurant borrowed $110,000 on October 1 by signing a note payable to Hometown Ban...

Q: Required 1. Compute the lower of cost or market for the inventory applied separately to each item. 2...

A: 1. Inventory is Valued lower cost or market value.         LCM Applied     Item Units Cost per ...

Q: Assume that Lenovo(CHN) leased equipment that was carried at a cost of ¥ 150.000,000 to Sharon Swand...

A: Journal entry is first step of recording business transactions in the books of account. It is the fi...

Q: A stock splita. has no effect on total stockholders’ equity.b. increases assets and stockholders’ eq...

A: Answer:   Option a

Q: Activity-Based Budgeting (ABB) with Continuous Improvement OFC Company (Exercise10-41) has decided t...

A: Click to see the answer

Q: Qualitative characteristics of accounting information - Relevance - Reliability - Comparability - Co...

A: The qualitative characteristics of accounting information is useful for decision and reporting purpo...

Q: a) ISA 315 Identifying and Assessing the Risks of Material Misstatement through Understanding the En...

A: Internal control system is the rules, procedures and mechanisms to be conducted internally within th...

Q: Prepare journal entries to record the following transactions of Recycled Fashion retail store. Recyc...

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. Th...

Q: During the year, Trombley Incorporated has the following inventory transactions.For the entire year,...

A: 1a.  

Q: “In an EDI system, only the customer needs to verify that the order being placed is from a valid sup...

A: Electronic Data Interchange:   Electronic data interchange (EDI) is the channel between the compute...

Q: Save-the-Earth Co. reports the following income statement accounts for the year ended December 31. P...

A: Income statement:   It is a financial statement prepared by a company that reports revenues and expe...

Q: PRS Corporation uses one of the cash conversion models to manage its cash account.  Recently, someon...

A: Miller-Orr Model is used to find out the optimum cash balance level which subsequently reduces the c...