Introduction To Managerial Accounting
8th Edition
ISBN: 9781259917066
Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 11, Problem 16E
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 e 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 d shoots 10 ducks using the same amount of shotgun shells he used on his previous hunting trip to bag 8 ducks, How much would it base cost him to shoot the last two ducks Explain
3. Which costs e relevant in a decision of whether Bill should give up bunting? Explain.
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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.
Miss Jana Lim, a graduate of Cebu University, is going to Manila to review for the CPA Board Examination. She is considering to stay in a dormitory that is just a stone’s throw away from the review school during her 5-month stay in Manila. Her aunt, however, is offering her a room in her house which is about three (3) kilometers away from the school. She told her aunt that she would first conduct differential analysis before making her decision on where to stay. She listed the following costs and cost estimates:
If she will stay in
Her Aunt’s House
A Dormitory
Plane ticket: Cebu-Manila-Cebu
₱8,000
₱8,000
Tuition Fee (1)
1,000
1,000
Boarding and lodging fee
-
25,000
Share in food and household expenses
10,000
-
Transportation
(Aunt’s house-school-Aunt’s house)
1,700
-
Snacks, etc., while in school
4,000
4,000
Books used in college to be used during the review
10,000
10,000
New review books to be purchased
2,000
2,000
Clothes to be brought to Manila…
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:
Camper and equipment:
Cost, $10,000; usable for eight seasons; 14 hunting trips per season
$ 89
Travel expense (pickup truck):
100 miles at $0.38 per mile (gas, oil, and tires—$0.22 per mile; depreciation and insurance—$0.16 per mile)
38
Shotgun shells (two boxes per hunting trip)
35
Boat:
Cost, $2,320, usable for eight seasons; 14 hunting trips per season
21
Hunting license:
Cost, $50 for the season; 14 hunting trips per season
4
Money lost playing poker:
Loss, $38 (Bill plays poker every weekend whether he goes hunting or stays at home)
38
Bottle of whiskey:
Cost, $20 per hunting trip (used to ward off the cold)
20
Total cost
$ 245
Cost per duck ($245 ÷ 8 ducks)
$ 31
Required:
1. Assuming the duck…
Chapter 11 Solutions
Introduction To Managerial Accounting
Ch. 11 - What is a relevant cost?Ch. 11 - Define the following terms: incremental cost,...Ch. 11 - Are variable costs always relevant costs? Explain.Ch. 11 - Prob. 4QCh. 11 - “Variable costs and differential costs mean the...Ch. 11 - Prob. 6QCh. 11 - Prentice Company is considering dropping one of...Ch. 11 - Prob. 8QCh. 11 - What is the danger in allocating common fixed...Ch. 11 - Prob. 10Q
Ch. 11 - Give at least four examples of possible...Ch. 11 - Prob. 12QCh. 11 - Define the following terms: joint products, joint...Ch. 11 - Prob. 14QCh. 11 - Prob. 15QCh. 11 - Prob. 16QCh. 11 - The Excel worksheet form that appears below is to...Ch. 11 - The Excel worksheet form that appears below is to...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Prob. 9F15Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Prob. 13F15Ch. 11 - Prob. 14F15Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Identifying Relevant Costs Syahn, AB, is a Swedish...Ch. 11 - Prob. 2ECh. 11 - Make or Buy Decision Troy Engines, Ltd,...Ch. 11 - Special Order Decision Imperial Jewelers...Ch. 11 - Volume Trade-off Decisions Outdoor Luggage, Inc.,...Ch. 11 - Prob. 6ECh. 11 - Sell or Process Further Decisions Dorsey Company...Ch. 11 - Volume Trade-Off Decisions Barlow Company...Ch. 11 - Special Order Decision Delta Company produces a...Ch. 11 - Make or Buy Decision Futura Company purchases the...Ch. 11 - Make or Buy Decision Han Products manufactures...Ch. 11 - Volume Trade-Off Decisions Benoit Company produces...Ch. 11 - Prob. 13ECh. 11 - Identification of Relevant Costs Kristen Lu...Ch. 11 - Prob. 15ECh. 11 - Identification of Relevant Costs Bill has just...Ch. 11 - Prob. 17ECh. 11 - Prob. 18PCh. 11 - Dropping or Retaining a Segment Jackson Count...Ch. 11 - Sell or Process Further Decision (Prepared from a...Ch. 11 - Prob. 21PCh. 11 - Prob. 22PCh. 11 - Make or Buy Decision Silven Industries, which...Ch. 11 - Prob. 24PCh. 11 - Prob. 25PCh. 11 - Close or Retain a Store Superior Markets. Inc.,...Ch. 11 - Sell or Process Further Decisions Come-Clean...Ch. 11 - Make or Buy Decisions “In my opinion, we ought to...
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