State University’s football team just received a bowl game invitation, and the students and alumni are excited. Holiday Travel Agency, located close to campus, decided to put together a bowl game package. For $50,000, a 737 jet could be chartered to take up to 170 people to and from the bowl city. A block of 85 hotel rooms could be confirmed for $400 each (a three-night commitment); Holiday Travel must pay for all the rooms in advance and cannot cancel any of them. The day of the game, a pregame buffet will be catered at $30 per person, and each person will receive a game favor package (consisting of a sweatshirt, a T-shirt, a commemorative pin with the school and bowl logos, and two pompons in the school’s colors). All items in the favor package can be purchased by Holiday Travel on December 21 and will cost the agency $25 per set. Buses will be chartered in the bowl city to transport participants to and from the airport and the game. Each bus holds 50 people and can be chartered for $500. The bowl game is scheduled for December 28, and the trip will span three nights—December 26, 27, and 28. Purchasers must reserve their package and pay in full by December 20.
Required:
- 1. List the resources that are mentioned in the above scenario.
- 2. For each resource, determine (a) whether it is a flexible or committed resource and (b) the type of cost behavior displayed (variable, fixed, mixed, or step cost).
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Chapter 3 Solutions
Cornerstones of Cost Management (Cornerstones Series)
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- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning