Solutions_Jan23

Solutions_Jan23 - Exercise 2-6 (15 minutes) 1. The salary...

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Exercise 2-6  (15 minutes) Direc t Indirect Cost Cost Object Cost Cost 1. The salary of the head  chef The hotel’s restaurant X 2. The salary of the head  chef A particular restaurant  customer X 3. Room cleaning supplies A particular hotel guest X 4. Flowers for the reception  desk A particular hotel guest X 5. The wages of the  doorman A particular hotel guest X 6. Room cleaning supplies The housecleaning  department X 7. Fire insurance on the  hotel building The hotel’s gym X 8. Towels used in the gym The hotel’s gym X Note: The room cleaning supplies would most likely be considered  an indirect cost of a particular hotel guest because it would not be  practical to keep track of exactly how much of each cleaning  supply was used in the guest’s room.
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Exercise 2-7  (15 minutes) Differential Opportunity Sun k Item Cost Cost Cos t 1. Cost of the new flat-panel  displays. ................................. X 2. Cost of the old computer  terminals. ................................ X 3. Rent on the space occupied by  the registration desk. .............. 4. Wages of registration desk  personnel. .............................. 5. Benefits from a new freezer. .... X 6. Costs of maintaining the old  computer terminals. ................ X 7. Cost of removing the old  computer terminals. ................ X 8. Cost of existing registration  desk wiring. ............................ X Note: The costs of the rent on the space occupied by the  registration desk and the wages of registration desk personnel are  neither differential costs, opportunity costs, nor sunk costs. These  are costs that do not differ between the alternatives and are  therefore irrelevant in the decision, but they are not sunk costs  since they occur in the future.
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Exercise 2-8  (15 minutes) 1. No. It appears that the overtime spent completing the job was  simply a matter of how the job happened to be scheduled. Under 
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This note was uploaded on 05/08/2008 for the course BUAD 250B taught by Professor Jackson during the Spring '07 term at USC.

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Solutions_Jan23 - Exercise 2-6 (15 minutes) 1. The salary...

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