Choosing Between Incentive PlansBrogdon is a ski instructor looking for employment in the Oregon mountains.He has received full-time job offers from two ski lodges,and must choose between them.The two jobs seem equally attractive,so Brogdon wants to choose the lodge which will pay him the higher compensation.Running Elk Lodge offers a wage of $8.00 per hour for a 40 hour week,plus 30% of the fees paid by walk-on pupils desiring private lessons,plus 40% of fees from pupils who specifically request a private lesson from Brogdon.Blustery Ridge Lodge offers a wage of only $6.00 per hour,plus 25% of walk-on private fees,45% of request private fees,and 15% of the fees paid by walk-on groups.Both lodges charge skiers $50 for private lessons and $100 per 5-person group for group lessons.Brogdon's previous experience leads him to expect weekly volume of 15 walk-on privates,6 request privates,and 20 walk-on groups.Required: Which job should Brogdon accept? What factors should Brogdon consider in making his choice?

Question

Quizplus · Accepted Answer

Feedback: The analysis is a relevant cost analysis,as presented in Chapter 11: 11ea6e70_bd9a_7424_8f54_e530d660a5f0_TB1699_00 The higher incentive pay at Blustery Ridge makes it the better deal,at least in terms of expected total compensation.Brogdon should also consider the other factors which might be important in selecting jobs,such as other benefits (use of certain facilities at the lodges when off duty,opportunity for learning new skills and improving his skiing,the overall desirability of the location,etc. )

Choosing Between Incentive PlansBrogdon Is a Ski Instructor Looking for Employment