Problem 5-45 (LO. 2, 4) Bluebird, Inc., does not provide its employees with any tax-exempt fringe benefits. The company is considering adopting a hospital and medical benefits insurance plan that will cost approximately $9,000 per employee. To adopt this plan, the company may have to reduce salaries and/or lower future salary increases. Bluebird is in the 25% (combined Federal and state rates) bracket. Bluebird is also responsible for matching the Social Security and Medicare taxes withheld on employees' salaries (at the full 7.65% rate). The hospital and medical benefits insurance plan will not be subject to the Social Security and Medicare taxes, and the company is not eligible for the small business credit for health insurance. The employees generally fall into two marginal tax rate (MTR) groups: Income Tax 12% 24% Social Security and Total Marginal Rate Medicare Tax 7.65% 1.45% 19.65% 25.45% The company has asked you to assist in its financial planning for the hospital and medical benefits insurance plan by computing the following: a. How much taxable compensation is the equivalent of $9,000 of exempt compensation for each of the two classes of employees? When required, carry out the computations to four decimal places, but round your final answers to the nearest whole dollar. Low (0.12) Before-tax compensation High (0.24)