Suppose you are the human resource manager for a cellular phone company with 700 employees. Top management has asked you to implement three additional fringe benefits that were negotiated with employee representatives and agreed upon by a majority of the employees. These include group term life insurance, a group legal services plan, and a wellness center. The life insurance is estimated to cost $910 per employee per quarter. The legal plan will cost $416 semiannually per employee. The company will contribute 40% to the life insurance premium and 75% to the cost of the legal services plan. The employees will pay the balance through payroll deductions from their biweekly paychecks. In addition, they will be charged 1 4% of their gross earnings per paycheck for maintaining the wellness center. The company will pay the initial cost of $600,000 to build the center. This expense will be spread over 5 years. (a) What total amount should be deducted per paycheck for these new fringe benefits for an employee earning $62,400 per year?
Suppose you are the human resource manager for a cellular phone company with 700 employees. Top management has asked you to implement three additional fringe benefits that were negotiated with employee representatives and agreed upon by a majority of the employees. These include group term life insurance, a group legal services plan, and a wellness center. The life insurance is estimated to cost $910 per employee per quarter. The legal plan will cost $416 semiannually per employee. The company will contribute 40% to the life insurance premium and 75% to the cost of the legal services plan. The employees will pay the balance through payroll deductions from their biweekly paychecks. In addition, they will be charged 1 4% of their gross earnings per paycheck for maintaining the wellness center. The company will pay the initial cost of $600,000 to build the center. This expense will be spread over 5 years. (a) What total amount should be deducted per paycheck for these new fringe benefits for an employee earning $62,400 per year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Suppose you are the human resource manager for a cellular phone company with 700 employees. Top management has asked you to implement three additional fringe benefits that were negotiated with employee representatives and agreed upon by a majority of the employees. These include group term life insurance, a group legal services plan, and a wellness center.
The life insurance is estimated to cost $910 per employee per quarter. The legal plan will cost $416 semiannually per employee. The company will contribute 40% to the life insurance premium and 75% to the cost of the legal services plan. The employees will pay the balance through payroll deductions from their biweekly paychecks. In addition, they will be charged
%
of their gross earnings per paycheck for maintaining the wellness center. The company will pay the initial cost of $600,000 to build the center. This expense will be spread over 5 years.
| 1 |
| 4 |
(a)
What total amount should be deducted per paycheck for these new fringe benefits for an employee earning $62,400 per year?
Transcribed Image Text:Suppose you are the human resource manager for a cellular phone company with 700 employees. Top management has asked you to implement three additional fringe benefits that were negotiated with employee
representatives and agreed upon by a majority of the employees. These include group term life insurance, a group legal services plan, and a wellness center.
The life insurance is estimated to cost $910 per employee per quarter. The legal plan will cost $416 semiannually per employee. The company will contribute 40% to the life insurance premium and 75% to the
cost of the legal services plan. The employees will pay the balance through payroll deductions from their biweekly paychecks. In addition, they will be charged 1% of their gross earnings per paycheck for
maintaining the wellness center. The company will pay the initial cost of $600,000 to build the center. This expense will be spread over 5 years.
(a) What total amount should be deducted per paycheck for these new fringe benefits for an employee earning $62,400 per year?
$
(b) What is the total annual cost of the new fringe benefits to the company?
$
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