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42 Relevant costing PART 2 43 44 Nimesh has been working full-time as store manager in Kemptville, Ontario. He has applied for admission to the
42 Relevant costing PART 2 43 44 Nimesh has been working full-time as store manager in Kemptville, Ontario. He has applied for admission to the Masters - Engineering at Carleton University. 45 If accepted, he will resign from his job and move to Ottawa, Ontario. Nimesh has assembled the following data to make the decision: 46 47 Nimesh's annual salary as a store manager $ 50,100 48 University tuition and fees $ 27.100 49 University books and supplies expense $ 3,000 50 Monthly_living expense in Kemptville $ 800 51 Monthly living expense in Ottawa $ 1,600 52 Monthly auto expenses in Kemptville $ 350 53 Monthly auto expenses in Ottawa 350 54 Cost of new clothes purchased just prior to resigning $ 790 55 Moving expenses 3,500 56 57 Number of months to complete the Masters program 18 58 Required: 59 a) Calculate the following in the context of Nimesh's decision of earning an Masters degree if it will take him 18 months to complete the program: 60 61 () Total sunk costs (if any) 62 63 () Total differential or incremental costs (if any) 64 65 (iii) Total opportunity costs (if any) 66 67 b) What is your best estimate of the total cost to Nimesh of earning an Masters degree if it will take him 18 months to complete the program? 68 69 C) Suppose you are Nimesh. What two specific additional information would you need in order to make a rational decision to pursue and successfully complete the Masters program at Carleton? Explain. 70 71 72 73
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