Calculating Profit Sharing Pay Awards

Calculating Profit Sharing Pay Awards In your new role as compensation analyst, you have been asked to estimate the dollar amount of the profit-sharing pool based on three approaches as well as the allocation of profit-sharing awards to eligible employees. The company’s profits equal $35 million. You are considering the following three formulas for determining the total profit-sharing pool. First-Dollar of Profits: The company agrees to share 4.0 percent of all profits up to $12 million. Graduated First-Dollar-of-Profits: The company agrees to share 3.0 percent of all profits up to $15 million, and 5.0 percent of all profits up to $40 million. Profitability Threshold Formula: The company will share 1.0 percent of the profits above $10 million up to $17 million. There are 260 employees whose total annual base pay equals $2, 100,000. The total profit-sharing pool for: (Round your answers to the nearest hundredths place.) (a) First-dollar of profits is $ (b) Graduated first-dollar of profits is $ (c) Profitability threshold formula is $|