The table below shows the typical hours worked by employees at a company. A salaried employee makes [tex]$\$[/tex]78,000[tex]$ per year. Hourly employees get paid $[/tex]\[tex]$26$[/tex] per hour, but get [tex]$\$[/tex]39$ per hour for each hour over 40 hours.

\begin{tabular}{|c|c|c|c|c|c|c|}
\hline
Sun. & Mon. & Tues. & Wed. & Thurs. & Fri. & Sat. \\
\hline
0 & 8 & 8.5 & 9.5 & 10 & 8 & 3 \\
\hline
\end{tabular}

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.

Please select the best answer from the choices provided.



Answer :

To determine the best payment option for a new employee, let's calculate both the weekly pay for a salaried employee and for an hourly employee based on the given data.

First, for the salaried employee:
1. The annual salary is [tex]$78,000. 2. There are 52 weeks in a year. 3. The weekly salary of a salaried employee is therefore: \[ \frac{78,000}{52} = 1,500 \text{ dollars} \] Next, let's calculate the pay for an hourly employee: 1. The hours worked each day of the week are: \[ [0, 8, 8.5, 9.5, 10, 8, 3] \] 2. The total hours worked during the week is the sum of these daily hours: \[ 0 + 8 + 8.5 + 9.5 + 10 + 8 + 3 = 47 \text{ hours} \] 3. Regular hours are up to 40 hours per week, and any hours beyond that are considered overtime. So: \[ \text{Regular hours} = 40 \text{ hours} \] \[ \text{Overtime hours} = 47 - 40 = 7 \text{ hours} \] 4. Hourly employees get paid $[/tex]26 per hour for regular hours and [tex]$39 per hour for overtime. Therefore, the total weekly pay for an hourly employee is: \[ (40 \text{ regular hours} \times 26 \text{ dollars/hour}) + (7 \text{ overtime hours} \times 39 \text{ dollars/hour}) \] \[ = (40 \times 26) + (7 \times 39) = 1,040 + 273 = 1,313 \text{ dollars} \] Now let's compare the two weekly pay amounts: - Weekly pay for salaried employee: $[/tex]1,500
- Weekly pay for hourly employee: [tex]$1,313 Since $[/tex]1,500 (salaried) is greater than $1,313 (hourly), the recommendation is that the new employee should choose the salaried pay option.

The best answer is:
c. Salaried pay. Salaried employees make more per week than hourly employees.