Question

In an effort to keep low-wage workers' salaries commensurate with the cost of living, a number of states have amended their constitutions to allow the minimum wage to be adjusted with inflation.

You are the accountant for a company that owns a chain of 12 fast food restaurants in a state which adjusts the minimum wage for inflation. Each restaurant employs 65 workers, each averaging 20 hours per week at the current federal minimum wage, $7.25 per hour.

(a)

How many hours at minimum wage are paid out each week by the company?

hr

(b)

At the current rate of $7.25 per hour, what is the amount (in $) of the weekly "minimum wage" portion of the restaurant's payroll?

$  

(c)

If the inflation rate this year is 0.7%, calculate the "adjusted" minimum wage rate (in $ per hour) to be paid next year. (Round your answer to two decimal places.)

$  per hour

(d)

How much in "additional wages" will the company have to pay out next year at the adjusted rate (in $)? (Round your answer to the nearest dollar.)

$

Answer 1

wage ale a) how much many hours at minimum paid out each week by the company. Sel; (a fast food restaurant) x (as workers) ( 20 hours pere = 12 x 65 x 20 - 15600 he 6) At the current cate od $7.25 per hour, what is the amount of weekly minimum wage portion of res toutant paydoll? 8012 15600 housy x $7.25 per = $113, 100 c) adjusted minimum wage rate ($ per hour) e current wage rate (100 %. + inflation) = $7.95 x (100+ 0.7). - $7.25% 100-7%. = $ 7.30075 = $7.3 per hom d) additional wages to be paid next year at adjustedvate = 15600 hours per week & Sa weeks & ($7.30 - $7.25 - 780,000 hours x $ 0.05 per hour - $ 39000