Analyzing labor costs The management of Reven Company is negotiating a new labor agreement with its employees. The labor contract that expires at the end of the current year includes the following elements:

The union negotiating team refers to the plan as one that provides employees with a very modest wage increase of 5 percent while concentrating on items that affect the employees' quality of life. Employees work five-day weeks and eight hours a day. Reven Company's payroll taxes are 10 percent of gross wages.

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Wage rate Paid vacation Paid holidays... Employer contributions to insurance programs $6.00 per hour 2 weeks per year 10 days per year $.50 per hour worked The union for the employees has proposed a new agreement that has the following provisions: Wage rate.... Paid vacation Paid holidays Employer's contribution to life and health insurance Employer's contribution to education and recreation programs $6.30 per hour 4 weeks per year 15 days per year $1.00 per hour worked $.50 per hour worked