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!
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