Ben Johnson is the manager of the jewelry department of a large chain of department stores. The department store has succeeded on the basis of customer service and quality of merchandise. As a manager, Ben is compensated with a salary of $200,000 and a bonus based on his unit's operating income. The bonus pool is 10% of company-wide operating income. When the unit's return on invested assets exceeds the rate of return of the whole company, the unit manager is included in the bonus pool, which is divided evenly among the managers who qualify for the bonus. In the current period, 25 managers qualified for the bonus, including Ben. Stock price Operating income Assets Invested Customer service Quality of service Total revenue O $200,000 O$268,750 Jewelry Department O $266,000 O $282,000 $ 1,999,000 $ 22,500,000 4 $ 3,500,000 Whole Company $42 $ 16,500,000 $ 287,500,000 Required: Based on the above information, what is the amount of total compensation for Ben? $ 123,600,000
Ben Johnson is the manager of the jewelry department of a large chain of department stores. The department store has succeeded on the basis of customer service and quality of merchandise. As a manager, Ben is compensated with a salary of $200,000 and a bonus based on his unit's operating income. The bonus pool is 10% of company-wide operating income. When the unit's return on invested assets exceeds the rate of return of the whole company, the unit manager is included in the bonus pool, which is divided evenly among the managers who qualify for the bonus. In the current period, 25 managers qualified for the bonus, including Ben. Stock price Operating income Assets Invested Customer service Quality of service Total revenue O $200,000 O$268,750 Jewelry Department O $266,000 O $282,000 $ 1,999,000 $ 22,500,000 4 $ 3,500,000 Whole Company $42 $ 16,500,000 $ 287,500,000 Required: Based on the above information, what is the amount of total compensation for Ben? $ 123,600,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject: acounting
Transcribed Image Text:Ben Johnson is the manager of the jewelry department of a large chain of department stores. The department store has succeeded on
the basis of customer service and quality of merchandise. As a manager, Ben is compensated with a salary of $200,000 and a bonus
based on his unit's operating income. The bonus pool is 10% of company-wide operating income. When the unit's return on invested
assets exceeds the rate of return of the whole company, the unit manager is included in the bonus pool, which is divided evenly
among the managers who qualify for the bonus. In the current period, 25 managers qualified for the bonus, including Ben.
Stock price
Operating income
Assets invested
Customer service
Quality of service
Total revenue
Jewelry
Department
O $200,000
O$268,750
O $266,000
O $282,000
$ 1,999,000
$ 22,500,000
4
$ 3,500,000
Whole Company
$ 42
5 16,500,000
$ 287,500,000
123,600,000
Required:
Based on the above Information, what is the amount of total compensation for Ben?
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