Is the $179,750 cost per hour a fixed, variable, or mixed cost? Explain

1. Is the $179,750 cost per hour a fixed, variable, or mixed cost? Explain.

2. Exact details about the cost composition of the Air Force One travel are kept secret to protect the president. Use your imagination, and the reading above, to make a list of the costs that you think might be included in $179,750 per hour cost estimate.

3. Categorize each cost in your list as fixed, variable, or mixed.

4. The number of trips taken by a president in any given year fluctuates and is dependent on the political climate, crises, economics, and the like. How useful do you think this cost per hour is?

5. What purpose(s) can the $179,750 cost per hour be used for? Are there any purposes for which that cost is not representative of the “true” cost?

6. Can you think of a better way to represent/communicate the cost of Air Force One?

7. Do you think the reimbursement policy is fair to the president? Why or why not?

8. Do you think the reimbursement policy is fair to the taxpayers? Why or why not?

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