Question
Head Corporation is a maker of ski and other outdoor sporting equipment. The company has three operating departments. John, Mary and Steve are managers in
Head Corporation is a maker of ski and other outdoor sporting equipment. The company has three operating departments. John, Mary and Steve are managers in each of these departments. The Company has recently instituted a revamped short term incentive plan, details of which are shown below. Calculate the annual bonus each employee.
| Employee | Helen | Lisa | Matt | Goal |
| Salary | 105,000 | 130,000 | 90,000 | |
| Target Incentive | 25% | 30% | 20% | |
| Component | ||||
| Company | 25% | 30% | 20% | Net Income |
| Department | 50% | 50% | 50% | Divisional Net Income |
| Individual | 25% | 20% | 30% | Annual milestones |
| Target | ||||
| Multipliers | ||||
| < 80% | 0% | 0% | 0% | |
| 80% - 99% | 90% | 90% | 90% | |
| 100% - 125% | 100% | 100% | 100% | |
| >126% | 120% | 120% | 120% | |
| Actual results | ||||
| Company | 110% | 110% | 110% | |
| Department | 85% | 110% | 130% | |
| Individual | 120% | 100% | 75% |
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College Accounting A Contemporary Approach
Authors: David Haddock, John Price, Michael Farina
5th Edition
126078035X, 978-1260780352
