Rob Roberts has been working a summerjob that pays $1 , 100 a month. His employer has

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Rob Roberts has been working a summerjob that pays $1 , 100 a month. His employer has offered to convert the job into a full-time position at $1,500 per month. Takehome pay is 70 percent of these amounts. In view of this offer, Rob is tempted not to return to school for the coming year. His friend Alice is trying to convince him to return to school.

Rob remarks, "I've been talking to other friends, and no matter how you figure it, school is extremely expensive. Tuition is about $2,200 per year net of scholarship assistance. Books and supplies are another $800. Room and board will cost $6,000 a year even if I share a room. It costs $2,400 a year to keep up my car. Clothing and other incidentals amount to about $3,000 per year. I figure school will cost me the total of all these costs, which is $14,400 plus my lost salary of $18,000 per year. At

$32,200 a year, who can justify higher education?"

If you were Alice, how would you respond to Rob's remarks? The costs of room, board, car, clothing, and other incidentals will be the same whether or not Rob returns to school.

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Cost Accounting

ISBN: 9780256257113

4th Edition

Authors: Michael W. Maher, Edward B. Deakin

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