BANISTER SERVICES INC. Months Cost January-March $ $ 1800.00 April-May 3450.00 1600.00 June-October November December Total Cost 3150.00 $ 10000.00 PERMANENT EMPLOYEES Salaries 3595.50 Federal Unemployment Taxes 128.00 State Unemployment Taxes 864.00 Medical and Dental Insurance 720.00 10,000.00 47,000.00 Bramble Processing Company would save $ 37000.00 Bramble Processing Company performs word-processing services for business clients and students in a university community. The work for business clients is fairly steady throughout the year. The work for students peaks significantly in December and May as a result of term papers, research project reports, and dissertations. Two years ago, the company attempted to meet the peak demand by hiring part-time help. This led to numerous errors and much customer dissatisfaction. A year ago, the company hired four experienced employees on a permanent basis in place of part-time help. This proved to be much better in terms of productivity and customer satisfaction. But, it has caused an increase in annual payroll costs and a significant decline in annual net income. Recently, Melissa Braun, a sales representative of Banister Services Inc., has made a proposal to the company. Under her plan, Banister will provide up to four experienced workers at a daily rate of $50 per person for an 8-hour workday. Banister workers are not available on an hourly basis. Bramble would have to pay only the daily rate for the workers used. The owner of Bramble Processing, Carol Holt, asks you, as the company's accountant, to prepare a report on the expenses that are pertinent to the decision. If the Banister plan is adopted, Carol will terminate the employment of two permanent employees and wil keep two permanent employees. At the moment, each employee earns an annual income of $23,500. Carol indicates that if the Banister Services plan is accepted, her needs for temporary workers will be as follows. Months January-March April-May June-October November-December Number of Employees 2 3 2 3 Working Days per Month 18 23 16 21 Answer the following (a) Prepare a report showing the comparative payroll expense of continuing to employ permanent workers compared to adopting the Banister Services Inc. plan. BANISTER SERVICES INC. Months Cost January-March 1800.00 April-May 3450.00 June-October 1600.00 November December 3150.00 Total Cost $ 10000.00 BANISTER SERVICES INC. Months Cost January-March $ $ 1800.00 April-May 3450.00 1600.00 June-October November December Total Cost 3150.00 $ 10000.00 PERMANENT EMPLOYEES Salaries 3595.50 Federal Unemployment Taxes 128.00 State Unemployment Taxes 864.00 Medical and Dental Insurance 720.00 10,000.00 47,000.00 Bramble Processing Company would save $ 37000.00 Bramble Processing Company performs word-processing services for business clients and students in a university community. The work for business clients is fairly steady throughout the year. The work for students peaks significantly in December and May as a result of term papers, research project reports, and dissertations. Two years ago, the company attempted to meet the peak demand by hiring part-time help. This led to numerous errors and much customer dissatisfaction. A year ago, the company hired four experienced employees on a permanent basis in place of part-time help. This proved to be much better in terms of productivity and customer satisfaction. But, it has caused an increase in annual payroll costs and a significant decline in annual net income. Recently, Melissa Braun, a sales representative of Banister Services Inc., has made a proposal to the company. Under her plan, Banister will provide up to four experienced workers at a daily rate of $50 per person for an 8-hour workday. Banister workers are not available on an hourly basis. Bramble would have to pay only the daily rate for the workers used. The owner of Bramble Processing, Carol Holt, asks you, as the company's accountant, to prepare a report on the expenses that are pertinent to the decision. If the Banister plan is adopted, Carol will terminate the employment of two permanent employees and wil keep two permanent employees. At the moment, each employee earns an annual income of $23,500. Carol indicates that if the Banister Services plan is accepted, her needs for temporary workers will be as follows. Months January-March April-May June-October November-December Number of Employees 2 3 2 3 Working Days per Month 18 23 16 21 Answer the following (a) Prepare a report showing the comparative payroll expense of continuing to employ permanent workers compared to adopting the Banister Services Inc. plan. BANISTER SERVICES INC. Months Cost January-March 1800.00 April-May 3450.00 June-October 1600.00 November December 3150.00 Total Cost $ 10000.00