Activity-Based Costing

question 122

Essay

Activity-based costing.Carlton Fisher,the manager of Kingfish Charters,uses activity-based costing to compute the costs of his deep-sea fishing charters.Each chartered boat holds six paying customers and a guide.The company offers two types of charters to corporations planning events-half-day trips for beginners and full-day trips for more seasoned fishermen.The breakdown of the costs is as follows:

Required:
a.Compute the cost of a corporate event requiring four boats for half-day charters for 28-persons (including four guides).
b.Compute the cost of a corporate event requiring four boats for full-day charters for 28-persons (including four guides).
c.Recommend a minimum price per customer to the manager if he wants to cover his costs.
(Kingfish Charters;activity-based costing. )

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