Question

Special Surgical Center is looking at ways to decrease operating costs. The CEO thinks that salaries and wages can be cut, but the company’s bylaws state that salaries and wages must equal no less than 20% of the company’s total costs. That 20% threshold (for 2018) was $40,980,000.00. Can the CEO justify cutting salaries, if the center performed (in 2018) 385 services, had a staffing ratio of 2.2, and the average wage was $43,400

Answer 1

$40,980,000 Answer Overall limit prescribed 20% threshold Total salary costs in 2018 (385 services *2.2* $ 43,400) 20% of salary costs $36,759,800 $7,351,960 Salary cut amount (within limit) $7,351,960