Question

Sheehan works for Andy Company and is a superior sales guy. His total compensation this year is $400,000. Andy sponsors an integrated profit sharing plan with a base percentage of 5% and a maximum excess percentage. It uses the current wage base as the integration level. What is the excess percentage that will be applied Sheehan's compensation above the integration level? a. 59. b. 5.7%. c. 10%. d. 10.7%.

Answer 1

Answert. Option cc) 10.40. According to the question, base percentage = 5% so excess bercentage will be twice always. ese (582) •%. - 10/0) the base Sheehan will receine 5% from o to wage base limet $132,900 (2019) 10% on income above the wage base up to Conered compensation Lime't of $280,000 (2019) Hence, tozar contribution by the company for Sheehan = ($ 280,000 - $132,900] x 10 % + $132,900 X 54. $147,100 %10% + $132,900 x 540 = $ 14,710 + $ 6,645 = $ 21,355 applied for Sheehan's Thus, the excess bercentagre compensation is 10 640 ·