Angel Corporation gives three weeks\' paid vacation to each employee who has wor
ID: 2388072 • Letter: A
Question
Angel Corporation gives three weeks' paid vacation to each employee who has worked at the company for one year. Based on studies of employee turnover and previous experience, management estimates that 65 percent of the employees will qualify for vacation pay this year.1. Assume that Angel's July payroll is $150,000, of which $10,000 is paid to employees on vacation. Figure the estimated employee vacation benefit for the month. Round interim calculation to nearest number. If required, round final answer to the nearest dollar.
Explanation / Answer
Angel's Annual Payroll is $150,000 x 12 And 65% of the employees qualify to a 3-week paid vacation(out of the 52 weeks in a year). Thus considering a uniform numbers of employees availing their respective paid time off, we can have the annual estimated employee vacation benefit as $150,000 x 12 x 3/52 x 65/100 Assume the annual estimated employee vacation benefit is spread uniformly across all months, thus the estimated employee benefit for the month of July is $150,000 x 12 x 3/52 x 65/100 / 12 = $150,000 x 3/52 x 65/100 = $5,625