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

Question

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

Quizplus · Accepted Answer

Relevant costs are those that differ between alternatives and will affect the future. Here, (2) Overtime compensation and (4) Signing bonus are the only items that differ between Job Offer A and Job Offer B, making them relevant for the decision.

Jason Is Trying to Decide Which One of Two Job