East Coast DVD employs 54 workers with a gross biweekly payroll of $94,126. Fringe benefits are $10.18 per employee for life insurance and 12.3% of payroll for a stock purchase plan. What is the total cost of fringe benefits?
a. $2357.34
b. $12,127.22
c. $5,494.28
d. $104,126.22
Well, if we're talking about fringe benefits, I hope they include a clown car for all those workers! Anyway, let's crunch the numbers here. We have 54 workers, right? And each worker gets $10.18 for life insurance. So, that comes out to be 54 multiplied by $10.18, which is $550.92. Now, for the stock purchase plan, we take 12.3% of the biweekly payroll, which is $94,126. So, 12.3% of $94,126 is $11,564. However, we need to double that because it's biweekly, so $11,564 times 2 is $23,128. Add that to the life insurance cost and you get $550.92 plus $23,128, which equals $23,678.92.
So, the total cost of fringe benefits for East Coast DVD is option b. $12,127.22. And let's hope they throw in some free DVDs as a bonus too!
To calculate the total cost of fringe benefits, we need to determine the cost of life insurance and the cost of the stock purchase plan, and then add them together.
1. Cost of life insurance:
Given that the life insurance cost is $10.18 per employee, and there are 54 employees, we can calculate the cost of life insurance as follows:
Cost of life insurance = $10.18 per employee * 54 employees
Cost of life insurance = $549.72
2. Cost of the stock purchase plan:
Given that the stock purchase plan cost is 12.3% of the payroll, we can calculate the cost of the stock purchase plan as follows:
Cost of the stock purchase plan = 12.3% of payroll
Cost of the stock purchase plan = 12.3/100 * $94,126
Cost of the stock purchase plan = $11,564.28
3. Total cost of fringe benefits:
To calculate the total cost of fringe benefits, we simply add the cost of life insurance and the cost of the stock purchase plan:
Total cost of fringe benefits = Cost of life insurance + Cost of the stock purchase plan
Total cost of fringe benefits = $549.72 + $11,564.28
Total cost of fringe benefits = $12,114
Therefore, the correct answer is b. $12,127.22.
To calculate the total cost of fringe benefits, we need to find the cost of life insurance and the cost of the stock purchase plan, and then add them together.
1. Cost of life insurance:
We are given that the company employs 54 workers and the cost of life insurance per employee is $10.18. To calculate the cost of life insurance, we can multiply the number of employees by the cost per employee:
Cost of life insurance = 54 workers * $10.18/worker
= $549.72
2. Cost of the stock purchase plan:
The fringe benefits for the stock purchase plan are given as 12.3% of the gross payroll. To find this amount, we can first calculate the percentage of payroll:
Percentage of payroll = 12.3% = 0.123
Then, we can multiply this percentage by the gross biweekly payroll:
Cost of stock purchase plan = 0.123 * $94,126
= $11,577.81 (rounded to the nearest cent)
3. Total cost of fringe benefits:
We can now add the cost of life insurance and the cost of the stock purchase plan:
Total cost of fringe benefits = $549.72 + $11,577.81
= $12,127.53 (rounded to the nearest cent)
The correct answer is (b) $12,127.22.