Question
ABC company has 1,000 employees. The total annual base pay for all employees combined equals $8,500,000. Assume company's profit to be $50 million. Consider the
ABC company has 1,000 employees. The total annual base pay for all employees combined equals $8,500,000. Assume company's profit to be $50 million. Consider the following three formulas for determining the total profit sharing pool: 1. First-Dollar of Profits: The company agrees to share three percent of all profits up to $25 million. 2. Graduated First-Dollar-of-Profits: The company agrees to share four percent of all profits up to $20 million, and six percent of all profits up to $45 million. 3. Profitability Threshold Formula: The company agrees to share five percent of all profits above $20 million up to $35 million.
Calculate the total profit sharing pool for all three formulas noted below.
Total profits under "First-Dollar of Profits" formula is :
Total profits under "Graduated First-Dollar-of-Profits" is :
Total profits under "Profitability Threshold Formula" is :
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started