Johan Jones owns a dress shop that has been very successful. He employs 3 sales associates who get paid $10 per hour for a 40-hour week. He decides to open up another dress shop on the other side of town. He hires three more sales associates with the same pay arrangements. After three months, Johan notices he is not making the same profit he did. His sales have doubled and his expenses are the same proportion except for wages. He knows that each sales associate should receive $1,720 each month yet his total wages expense for the month is $12,040. He worries that he is not paying close enough attention to the old store. What is his problem? Should he discuss this problem with all the sales associates?
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