htiman resource manager for ationål, å čéllulaär phone company with 800 employees. Top management has asked you to implement three additional fringe benefits that were negotiated with employee representatives and agreed upon by a majority of the employees. These include group term life insurance, a group legal services plan, and a wellness center. The life insurance is estimated to cost PHP260 per employee per quarter. The legal plan will cost PhP156 semiannually per employee. The company will contribute 40% to the life insurance premium and 75% to the cost of the legal services plan. The employees will pay the balance through payroll deductions from their biweekly paychecks. In addition, they will be charged 4% of their gross earnings per paycheck for maintaining the wellness center. The company will pay the initial cost of PHP500,000 to build the center. This expense will be spread over 5 years. a. What total amount should be deducted per paycheck for these new fringe benefits for an employee earning PHP41,600 per year? b. What is the total annual cost of the new fringe benefits to ABD International?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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You are the human resource manager for ABD International, a cellular phone company
with 800 employees. Top management has asked you to implement three additional
fringe benefits that were negotiated with employee representatives and agreed upon by
a majority of the employees. These include group term life insurance, a group legal
services plan, and a wellness center.
The life insurance is estimated to cost PhP260 per employee per quarter. The legal plan
will cost PHP156 semiannually per employee. The company will contribute 40% to the
life insurance premium and 75% to the cost of the legal services plan. The employees
will pay the balance through payroll dedudtions from their biweekly paychecks. In
addition, they will be charged 4% of their gross earnings per paycheck for maintaining
the wellness center. The company will pay the initial cost of PHP500,000 to build
the center. This expense will be spread over 5 years.
a. What total amount should be deducted per paycheck for these new fringe benefits for
an employee earning PHP41,600 per year?
b. What is the total annual cost of the new fringe benefits to ABD International?
Transcribed Image Text:You are the human resource manager for ABD International, a cellular phone company with 800 employees. Top management has asked you to implement three additional fringe benefits that were negotiated with employee representatives and agreed upon by a majority of the employees. These include group term life insurance, a group legal services plan, and a wellness center. The life insurance is estimated to cost PhP260 per employee per quarter. The legal plan will cost PHP156 semiannually per employee. The company will contribute 40% to the life insurance premium and 75% to the cost of the legal services plan. The employees will pay the balance through payroll dedudtions from their biweekly paychecks. In addition, they will be charged 4% of their gross earnings per paycheck for maintaining the wellness center. The company will pay the initial cost of PHP500,000 to build the center. This expense will be spread over 5 years. a. What total amount should be deducted per paycheck for these new fringe benefits for an employee earning PHP41,600 per year? b. What is the total annual cost of the new fringe benefits to ABD International?
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