Chapter 9.III, Problem 11RE

Jiffy Janitorial Service employs 48 workers and has a gross payroll of $25,200 per week. Fringe benefits are 6.4% for sick days and holiday leave. 5.8% for health and hospital insurance, and $14.50 per employee per week for uniform allowance.

a. What is the total weekly cost of fringe benefits for Jiffy?

$\begin{array}{l}25,200 \times .064=\$1,612.80\hfill \\ 25,200\times .058=\mathrm{1.461.60}\hfill \\ 48\times 14.50 = 696.00\hfill \\ \$3,770.40\hfill \end{array}$

b. What percent of payroll does this represent?

$R=\frac{p}{b}=\frac{3,770.40}{25,200.00}=1496=14\%$

c. What is Jiffy's annual cost of fringe benefits?

$3,770.40\times 52=\$196,060.80$

Annual cost of fringe benefits