Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Ben Johnson is the manager of the jewelry department of a large chain of department stores. The department store has succeeded on the basis of
Ben Johnson is the manager of the jewelry department of a large chain of department stores. The department store has succeeded on the basis of customer service and quality of merchandise. As a manager, Ben is compensated with a salary of $300,000 and a bonus based on his unit's operating income. The bonus pool is 10% of company-wide operating income. When the unit's return on invested assets exceeds the rate of return of the whole company, the unit manager is included in the bonus pool, which is divided evenly among the managers who qualify for the bonus. In the current period, 20 managers qualified for the bonus, including Ben. Jewelry Department Stock price Operating income Assets invested Customer service Quality of service Total revenue $ 1,998,000 $ 23,500,000 4 4 $ 3,600,000 Whole Company $ 40 $ 17,500,000 $ 288,500,000 5 8 $ 124,600,000 Required: Based on the above information, what is the amount of total compensation for Ben? O $300,000 O $390,250 O $387,500 O $399,500
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started