Chapter 9, Problem 23AT

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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

**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,

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,

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

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

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

**(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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