Calculating the Costs of Increasing the Total Compensation
Budget at Butcher Enterprises
Butcher Enterprises has experienced substantial employee
turnover among its office workers. During exit interviews,
more than 80 percent stated that low pay was the top
reason for resigning. The company conducted a survey of
local companies’ pay practices to confirm whether this
concern is valid. Indeed, Butcher Enterprises’ average
hourly pay rate for total compensation falls well below the
market. The compensation survey showed an average
hourly rate of $23 for total compensation. Of this amount,
wages are $16 per hour and benefits are $7 per hour. In
comparison, Butcher Enterprises spends an average hourly
rate of $19 for total compensation. Of this amount, 70
percent is allocated for wages.
1.1. On an average hourly basis, how much does Butcher
Enterprises spend on wages and benefits,
respectively, in dollars?
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