Question

You have checked model income statements and estimate your payroll expense will be 28% of revenue. You expect sales to be $312,112 per year. What should you budget MONTHLY for payroll?
a) $7,283

b) $8,480

c) $9,347

d) $12,960

Answer 1

Answer: a) $7,283

Explanation:

You expect payroll expense to be 28% of annual revenue which is $312,112 per year.

Annual payroll = 28% * 312,112

= $‭87,391.36‬ per year

The monthly figure will therefore be:

= ‭87,391.36‬/12 months

= $7,282.61

= $7,283