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Crystal Chandelier, the president of Glass Works Inc., has signed a contract that specifies she gets a bonus of 1 2 % of profit. The

Crystal Chandelier, the president of Glass Works Inc., has signed a contract that specifies she gets a bonus of 12% of profit. The bonus is tax deductible for the business, which faces a marginal tax rate of 40%. The profit before deductions for bonus and tax was $250,000 in 2022, $308,000 in 2023, and $380,000 in 2024.
Calculate the bonus and the tax for each of the following:
A. In 2022, the bonus is based on profit before deductions for bonus and tax
B. In 2023, the bonus is based on profit after deduction of bonus but before tax
C. In 2024, the bonus is based on profit after deductions of bonus and tax.

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