Question

Objectives of Allocation Samantha and Rashida are planning a trip to Padre Island, Texas, during spring break. Members of the varsity volleyball team, they are looking forward to four days of beach volleyball and parasailing. They will drive Samantha's car and estimate that they will pay the following costs during the trip Motel (4 nights at $145) Food (each) Gas in total Parasailing and equipment rental (each) 117 They have reservations at the SeaScape Motel, which charges $115 per night for a single, $145 per night for a double, and an additional $10 per night if a rollaway $580 155 132 added to a double room. but thinks that four days of partying and relaxing on the beach would be a great way to unwind from the Samantha's little sister, Kallie, wants to go along. S rigors of school. She figures he isn't into sports that she could ride with Samantha and Rashida and share their room Required: 1. Using incremental costs only, what would it cost Kallie to accompany Samantha and Rashida? 2. Using the benefits-received method, what would it cost Kallie to go on the trip? If required, round your intermediate calculations and final answer to the nearest cent.

Answer 1

Increase in Motel Cost = $15 per night for additional bed < 4 days = $15 x 4 = $60 Additional food cost = $155 Therefore, total cost of including K for the trip is $215. Prepare incremental analysis as follows: Motel cost Food Gas in total Total incremental cost Without K With K Incremental Cost S 580 S 640 S 60 $ 310 S 465S S 132S 132 S S 1,022 $1,237 S 215 It would cost $215 for K to accompany along. Cost to K using benefit-received method: Particulars Motel (S580+S60/3 Food Gas ($132/3) Total Amount $ 213.33 S 155.00 $ 44.00 $ 412.3 Thus, cost to K using benefit-received method would be $412.3