4. Examples of price charges per minute by AT&T for long-distance telephone calls within the United States at different times of the day and week are as follows:

Washington, Philadelphia Washington,

D.C. to D.C. to D.C. to

Philadelphia St. Louis Los Angeles

Peak-period (8 A.M. to 5 P.M.,

Monday through Friday) $0.21 $0.22 $0.24

Evenings (5 P.M. to 11 P.M.

Monday through Friday) $0.13 $0.13 $0.14

Nights and weekends $0.11 $0.11 $0.12

a. Are there differences in incremental or outlay costs per minute for AT&T for telephone calls made during peak hours compared to telephone calls made at other times of the day?

b. Why do you think AT&T charges different prices per minute for telephone calls made during peak hours compared to telephone calls made at other times of the day? (Horngren, p. 457, 12-25) 175 The Varied Approach