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



Answer :

Let's go through the details step by step to determine which payment option to recommend:

1. Data Provided:
- Salaried employee makes [tex]$78,000 per year. - Hourly employee gets $[/tex]26 per hour regularly and [tex]$39 per hour for overtime (hours over 40 per week). - Hours worked in a week: 0 (Sun), 8 (Mon), 8.5 (Tues), 9.5 (Wed), 10 (Thurs), 8 (Fri), 3 (Sat). 2. Calculating Total Hours Worked in the Week: The total hours worked by the employee in the week is: \[ 0 + 8 + 8.5 + 9.5 + 10 + 8 + 3 = 47 \text{ hours} \] 3. Determining Regular and Overtime Hours: - Regular hours are capped at 40 hours per week. - Overtime hours are any hours worked beyond 40 hours. - Hence, regular hours = 40 and overtime hours = 47 - 40 = 7 hours. 4. Weekly Salary for Salaried Employee: The annual salary for the salaried employee is $[/tex]78,000.
To find the weekly salary:
[tex]\[ \text{Weekly Salary} = \frac{\text{\$78,000}}{52} = \$1500 \][/tex]

5. Weekly Salary for Hourly Employee:
- Regular pay for 40 hours:
[tex]\[ 40 \text{ hours} \times \$26/\text{hour} = \$1040 \][/tex]
- Overtime pay for 7 hours:
[tex]\[ 7 \text{ hours} \times \$39/\text{hour} = \$273 \][/tex]
- Total weekly salary for the hourly employee:
[tex]\[ 1040 + 273 = \$1313 \][/tex]

6. Comparison of Weekly Earnings:
- Weekly earnings for the salaried employee: [tex]$1500 - Weekly earnings for the hourly employee: $[/tex]1313
- Since [tex]$1500 > $[/tex]1313, the salaried employee earns more weekly.

Therefore, the recommended payment option for a new employee, based on the weekly earnings comparison, would be:

c. Salaried pay. Salaried employees make more per week than hourly employees.