Question

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, $15,000; usable for eight seasons; 8 hunting trips per season | $ | 234 | ||

Travel expense (pickup
truck): |
||||

100 miles at $0.37 per mile (gas, oil, and tires—$0.26 per mile; depreciation and insurance—$0.11 per mile) | 37 | |||

Shotgun shells (two boxes per hunting trip) | 35 | |||

Boat: |
||||

Cost, $2,240, usable for eight seasons; 8 hunting trips per season | 35 | |||

Hunting
license: |
||||

Cost, $40 for the season; 8 hunting trips per season | 5 | |||

Money lost playing
poker: |
||||

Loss, $22 (Bill plays poker every weekend whether he goes hunting or stays at home) | 22 | |||

Bottle of
whiskey: |
||||

Cost, $20 per hunting trip (used to ward off the cold) | 20 | |||

Total cost |
$ |
388 |
||

Cost per duck
($388 ÷ 8 ducks) |
$ |
48 |
||

**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 8 ducks using the same amount of shotgun shells he used on his previous hunting trip to bag 8 ducks. How much would it have cost him to shoot the last two ducks?

Answer #1

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 and
equipment:
Cost, $1,200;
usable for eight seasons; 10 hunting trips per season
$
120
Travel expense (pickup
truck):
100
miles at $0.38 per mile (gas, oil, and tires—$0.26 per mile;
depreciation and insurance —$0.12 per...

Exercise 11-16 Identification of Relevant Costs [LO11-1]
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, $11,000; usable for eight
seasons; 10 hunting trips per season
$
138
Travel expense (pickup
truck):
100 miles at $0.39 per mile
(gas, oil, and tires—$0.22 per mile; depreciation and
insurance—$0.17...

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