Question

The table below shows the typical hours worked by employees at a company. A salaried employee makes $67,000 per year. Hourly employees get paid $25 per hour, but get $37.50 per hour for each hour over 40 hours. Sun. Mon. Tues. Wed. Thurs. Fri. Sat. 0 10 8 8 7 6.5 4.5 Which of the payment options would you recommend to a new employee? a. Either one. Hourly and salaried employees earn the same amount per week. b. Hourly pay. Hourly employees make more per week than salaried employees. c. Salaried pay. Salaried employees make more per week than hourly employees. d. There is not enough information given to compare weekly earnings.

Answer 1

First, we must calculate the weekly pay of an employee that is paid a fixed amount. Given that there are 52 weeks in a year, the weekly pay for a regularly paid employee is: 67,000 / 52 = $1,288.46 Now, we calculate the number of hours an employee that is paid hourly works per week: 0 + 10 + 8 + 8 + 7 + 6.5 + 4.5 = 44 So this employee is paid: 25 x 40 + 37.5 x 4 = $1,150 Therefore, it is recommended that a new employee goes for the salaried pay since the weekly earnings are greater in this option. The answer is C.