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Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

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BuyFindarrow_forward

Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

Sky High Crane Company employs 150 workers and has a gross payroll of $282,100 per week. Fringe benefits are 6 1 2 % of gross payroll for sick days and holiday leave, 9.1 % for health and hospital insurance, 4.6 % for the retirement fund, and $10.70 per employee per week for a stock purchase plan.

a. What is the total weekly cost of fringe benefits for the company?

b. What percent of payroll does this represent?

c. What is the company’s annual cost of fringe benefits?

(a)

To determine

To calculate: The total weekly cost of the fringe benefits for the company, if the company has 150 workers with the gross payroll of $282,100 per week and has various fringe benefits.

Explanation

Given Information:

The company has 150 workers with the gross payroll of $282,100 per week.

The fringe benefits are:

For sick days and holiday leave, 612% of gross payroll.

For health and hospital insurance, 9.1% of gross payroll.

For the retirement fund, 4.6% of gross payroll.

And, for a stock purchase plan, $10.70 per employee per week.

Formula used:

Steps to find the employers fringe benefits expense,

Step 1: For the fringe benefit with percent of gross payroll, use the formula,

Fringe benefits=Gross payroll×Fringe benefit percent

For fringe benefit which is a dollar amount per employee, use the formula,

Fringe benefits=Amount×Number of employee

Step 2: Add all the fringe benefits to find the total fringe benefits.

Calculation:

Consider the given information, the company has 150 workers with the gross payroll of $282,100 per week.

As the fringe benefit on sick and holiday leave is 612% of gross payroll. Therefore,

Fringe benefit on sick and holiday leave=Gross payroll×Fringe benefit percent=$282,100×612%=$282,100×132×100=$18,336.5

And, the fringe benefit on health and hospital insurance is 9.1% of gross payroll. Therefore,

Fringe benefit on health and hospital insurance=Gross payroll×Fringe benefit percent=$282,100×9

(b)

To determine

To calculate: The percent of payroll represented by the fringe benefits if the company has 150 workers with the gross payroll of $282,100 per week and has various fringe benefits.

(c)

To determine

To calculate: The annual cost of fringe benefits of the company if the company has 150 workers with the gross payroll of $282,100 per week and has various fringe benefits.

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