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    Vato3310's Avatar
    Vato3310 Posts: 1, Reputation: 1
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    #1

    Apr 15, 2008, 03:56 PM
    Managerial Accounting
    Ok so here is the problem:

    Steve went on a fishing trip. Caught 2 salmon. The following info is based on an avg of 10 fishing trips per year:

    Cost per fishing trip:

    - Depreciation on boat (annual depreciation of $1,500 / 10 trips) = $150
    - Boat moorage fees (annual rental of $1200/ 10 trips) = $120
    - Expenditures on fish gear, excep snagged lures (annual expenditures of $200 / 10 trips) = $20
    - snagged lures = $7
    - fishing license (yearly license of $40 / 10 trips) = $4
    - Fuel and upkeep of boat = $25
    - Junk food consumed = $8

    Toal cost per fishing trip = $334
    Cost per salmon (334 / 2 salmon) - $167

    QUESTION: what costs are relevant to a decision as to whether he should go on another trip or not?

    AND

    discuss the costs that are relevant in a decision of whether Steve should give up fishing?


    Help me!
    srod's Avatar
    srod Posts: 12, Reputation: 1
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    #2

    Apr 15, 2008, 05:08 PM
    Well, I figure none of it is relevant if it adds to the over-all peace and happiness at home. I send my husband fishing often... it keeps us all happy! I do remind him that he needs to get such-and-such done first or take care of this or that. It works well as a bargaining chip.

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