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Unformatted text preview: M4-12 1. 2. 3. 4. g e f h 5. 6. 7. 8. b a c d M4-15 Relevant Costs Irrelevant Costs Opportunity Outlay Outlay Sunk 1. The case will require three attorneys to stay four nights in a Washington hotel. The predicted hotel bill is $1,200. 2. Taylor, Taylor, and Tower's professional staff is paid $2,000 per day for out-of-town assignments. 3. Last year, depreciation on Taylor, Taylor, and Tower's office was $12,000. 4. Round-trip transportation to Washington is expected to cost $250 per person. 5. The firm has recently accepted an engagement that will require partners to spend two weeks in Atlanta. The predicted out-of-pocket costs of this engagement are $8,500. 6. The firm has a maintenance contract on its computer equipment that will cost $2,200 next year. 7. If the firm accepts the engagement in Washington, it will have to decline a conflicting engagement in Hilton Head that would have provided a net cash flow of $15,000. 8. The firm's variable overhead is $80 per client hour. 9. The firm pays $250 per year for Tower's subscription to a law journal. 10. Last year, the firm paid $3,500 to increase the insulation in its building. X X X X X X X X X X X ...
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This note was uploaded on 05/08/2011 for the course 193431918X 711 taught by Professor Braham during the Spring '11 term at Missouri (Mizzou).
- Spring '11