What total amount should be deducted per paycheck for these new fringe benefits for an employee earning $83,200 per year? What is the total annual cost of the new fringe benefits to the company?
What total amount should be deducted per paycheck for these new fringe benefits for an employee earning $83,200 per year? What is the total annual cost of the new fringe benefits to the company?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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 $390 per employee per quarter. The legal plan will cost $468 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 $900,000 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 $83,200 per year?
What is the total annual cost of the new fringe benefits to the company?
$
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