Bill has just returned from a duck hunting trip. He brought homeeight ducks. Bill’s friend, John, disapproves of duck hunting, andto discourage Bill from further hunting, John presented him withthe following cost estimate per duck:
| | | |
| Camper and equipment: | | | |
| Cost, $15,000; usable for eight seasons; 10 hunting trips perseason | $ | 188 | |
| Travel expense (pickup truck): | | | |
| 100 miles at $0.46 per mile (gas, oil, and tires—$0.26 permile; depreciation and insurance—$0.20 per mile) | | 46 | |
| Shotgun shells (two boxes per hunting trip) | | 30 | |
| Boat: | | | |
| Cost, $2,080, usable for eight seasons; 10 hunting trips perseason | | 26 | |
| Hunting license: | | | |
| Cost, $70 for the season; 10 hunting trips per season | | 7 | |
| Money lost playing poker: | | | |
| Loss, $28 (Bill plays poker every weekend whether he goeshunting or stays at home) | | 28 | |
| Bottle of whiskey: | | | |
| Cost, $10 per hunting trip (used to ward off the cold) | | 10 | |
| Total cost | $ | 335 | |
| Cost per duck ($335 ÷ 8 ducks) | $ | 42 | |
| |
Required:
1. Assuming the duck hunting trip Bill has just completed istypical, what costs are relevant to a decision as to whether Billshould go duck hunting again this season?
2. Suppose Bill gets lucky on his next hunting trip and shoots10 ducks using the same amount of shotgun shells he used on hisprevious hunting trip to bag 8 ducks. How much would it have costhim to shoot the last two ducks?
