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Calculate the bonus award (percent of base salary) that would be given to the manager of each of the following four divisions under the proposed
Calculate the bonus award (percent of base salary) that would be given to the manager of each of the following four divisions under the proposed new bonus system. These divisions are representative of the range of divisions within IE. | ||||
(Budgeted Operating Profit) – (Budget Operating Assets x 12%) = Economic profit objective | ||||
($000) | ||||
Division | Budgeted Operating Profit | Budgeted Operating Assets | Actual Operating Profit | Actual Operating Assets |
A | $ 1,000 | $ 8,000 | $ 1,150 | $ 7,000 |
B | $ 1,000 | $ 8,000 | $ 4,500 | $ 7,000 |
C | $ 50 | $ 1,000 | $ 300 | $ 800 |
D | $ (700) | $ 4,000 | $ (300) | $ 4,200 |
E | $ 600 | $ 2,000 | $ 100 | $ 1,800 |
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