Jason is trying to decide which one of two job offers he will accept.Several items are presented below: $$\begin{array} { | l | r | r | }
\hline & \text { Job Offer A } & \text { Job Offer B } \
\hline \text { (1) Base salary } & \$ 40,000 & \$ 40,000 \
\hline \text { (2) Overtime compensation } & \text { Comp. time } & \text { Hourly rate } \
\hline \text { (3) Moving allowance } & \$ 2,000 & \$ 2,000 \
\hline \text { (4) Signing bonus } & \$ 1,000 & \$ 0 \
\hline \text { (5) Job search costs incurred } & \$ 500 & \$ 500 \
\hline
\end{array}$$ Which of the above items would be considered relevant costs?
A) (1),(3),(5)
B) (2),(4)
C) (5)
D) None of the above.

Question

Jason is trying to decide which one of two job offers he will accept.Several items are presented below: $$\begin{array} { | l | r | r | } 
\hline & \text { Job Offer A } & \text { Job Offer B } \
\hline \text { (1) Base salary } & \$ 40,000 & \$ 40,000 \
\hline \text { (2) Overtime compensation } & \text { Comp. time } & \text { Hourly rate } \
\hline \text { (3) Moving allowance } & \$ 2,000 & \$ 2,000 \
\hline \text { (4) Signing bonus } & \$ 1,000 & \$ 0 \
\hline \text { (5) Job search costs incurred } & \$ 500 & \$ 500 \
\hline
\end{array}$$  Which of the above items would be considered relevant costs?
A) (1),(3),(5)
B) (2),(4)
C) (5)
D) None of the above.

Quizplus · Accepted Answer

Relevant costs are those that differ between the alternatives. In this case, the overtime compensation (2) and signing bonus (4) differ between the two job offers.

Jason Is Trying to Decide Which One of Two Job