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Susan is contemplating whether to host a family reunion in june. the decision would increase her june food budget from its current amount of $400 to $700. what dollar amount pertaining to susan's june food budget is relevant to this decision? multiple choice question.

-$400
-$1,100
-$700
-$300

1 Answer

4 votes

Final answer:

The relevant cost to Susan's food budget decision is the incremental cost of $300, which is the increase from her current budget of $400 to the anticipated budget of $700 if she hosts the family reunion.

"The correct option is approximately option D"

Step-by-step explanation:

When considering the cost relevant to Susan's decision on whether to host a family reunion in June, we need to look at the incremental cost, which is the additional amount that her food budget would increase by. Susan's current food budget is $400, and if she decides to host the family reunion, it would increase to $700. Therefore, the incremental cost, which is the relevant cost for her decision, would be the difference between the two amounts.

So, we take the anticipated budget with the family reunion, $700, and subtract the current food budget, $400, to arrive at the incremental cost:

$700 (anticipated budget) - $400 (current budget) = $300

The dollar amount pertaining to Susan's June food budget that is relevant to this decision is therefore $300.

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