Bill has just returned from a duck hunting trip. He has brought home eight ducks
ID: 2477620 • Letter: B
Question
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:
Camper abd equipment : Cost, 1,900; usable for eight seasons; 10 hunting trips per season $190.00
Travel expense (pickup truck): 100 miles at $0.46 mile (gas, oil, and tires-$0.28 per mile; depreciation and insurance $0.18 per mile) $ 46.00
Shotgun shells (two boxes) $ 20.00
Boat: Cost, $2,240, usable for eight seasons; 10 hunting trips per season $28.00
Hunting license: Cost, $50 for the season; 10 hunting trips per season $ 5.00
Money lost playing poker: Loss, $30 (Bill plays poker every weekend) $ 30.00
Bottle of whiskey: Cost, $ 15 (used to ward off the cold) $ 15.00
Total cost $ 334.00
Cost per duck ($334.00 / 8 ducks) $ 41.75
Q1. 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?
Q 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?
? ? ? ? ? ? ? ? ? ? Total ?Explanation / Answer
The following Costs are assume sunk cost for the season: Camper and equipment Boat Cost Hunting License Monet Lost playing poker as he palys poker anyway Q1 Relevant costs for going again for duck hunting this season= Cost Amt$ TRAvel Expense 46 Shotgun Shells (assuming all used up) 20 Bottle of whisky 15 Total Relevant Cost 81 Q2 If Bill shhots 10 ducks , there will be no extra cost for the additional two ducks as the travel, shotgun shell and bottle of whisky cost will not change. On the reverse cost per duck will come down Relevant Cost/duck when 8 ducks shoot =81/8= $ 10.13 Relevant Cost/duck when 10 ducks shoot =81/10= $ 8.10
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.