Question

Claude Lopez is the president of Zebra Antiques. His employee, Dwight Francis, is due a raise. Dwight's current benefit analysis is as follows:

Yearly Benefit Costs		Company Cost (Current)			Employee Cost (Current)
Medical insurance		$	6,300.00		$	945.00
Dental insurance		$	140.00		$	140.00
Life insurance		$	216.00			0
AD&D		$	108.00			0
Short-term disability		$	43.20			0
Long-term disability		$	21.60			0
401(k)		$	540.00		$	1,080.00
Social Security		$	2,164.73		$	2,164.73
Medicare		$	506.27		$	506.27
Tuition reimbursement		$	2,200.00			0
Total yearly benefit costs (employer)		$	12,239.80
Employee’s annual salary			36,000.00
Total value of employee’s compensation		$	48,239.80

Required:

Compute the benefit analysis assuming:

• 7 percent increase in pay.
• 3 percent contribution to 401(k) will remain the same with a company match of 50 percent.
• 10 percent increase in medical and dental insurance premiums.

(Round your answers to 2 decimal places.)

Answer 1