CRP Relocation Cost Management and Budgeting

Question 1

Which method of cost tracking assigns all relocation expenses to a single corporate cost center rather than the hiring business unit?

Accepted Answer

Centralized billing

Answer

Centralized billing consolidates all relocation costs to one corporate cost center, simplifying administration and allowing for volume negotiating leverage.

Question 2

What is the primary purpose of a relocation cost estimate (RCE) prepared before an employee transfer is authorized?

Accepted Answer

To allow management to make an informed approval decision based on projected costs

Answer

The RCE gives management a projected total cost so they can weigh the expense against business need before authorizing the move.

Question 3

A company uses a 'capped lump sum' for relocation. What does this mean?

Accepted Answer

The employee receives a flexible payment up to a defined maximum amount

Answer

A capped lump sum provides the employee flexibility to spend up to a set maximum, after which the company bears no further liability.

Question 4

When benchmarking relocation program costs, which metric is most commonly used to compare spending across companies?

Accepted Answer

Average cost per relocating employee

Answer

Average cost per relocating employee normalizes spending regardless of company size, making it the standard benchmarking metric across the industry.

Question 5

Which type of relocation assignment typically results in the HIGHEST total cost to the employer?

Accepted Answer

International long-term assignment (1-3 years)

Answer

International long-term assignments carry the highest cost due to housing allowances, COLA adjustments, tax equalization, schooling, and repatriation expenses.

CRP - Certified Relocation Professional Practice Test

CRP - Certified Relocation Professional Practice Test

CRP Relocation Cost Management and Budgeting