Paul and Paula Petrocelli were trying to decide whether to go to the symphony or to the
Question:
Paul and Paula Petrocelli were trying to decide whether to go to the symphony or to the baseball game. They already have two nonrefundable tickets to “Pops Night at the Symphony? that cost $40 each. This is the only concert of the season they considered attending because it is the only one with the type of music they enjoy. The baseball game is the last one of the season, and it will decide the league championship. They can purchase tickets to the game for $20 each.
The Petrocelis will drive 50 kilometres round-trip to either event. Variable costs for operating their auto are $0.18 per kilometre, and fixed costs average $0.13 per kilometres for the 15,000 kilometres they drive annually. Parking at the symphony is free, but it costs $6 at the baseball game. To attend either event, Paul and Paula will hire a babysitter at $7 per hour. They expect to be gone 5 hours to attend the baseball game but only 4 hours to attend the symphony.
Compare the cost of attending the baseball game with the cost of attending the symphony. Focus on relevant costs. Compute the difference in cost, and indicate which alternative is more costly to the Petrocelis.
Step by Step Answer:
Management Accounting
ISBN: 978-0132570848
6th Canadian edition
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu