Problem

Business Ral Corp. has an incentive compensation plan under which a branch manager receive...

Business Ral Corp. has an incentive compensation plan under which a branch manager receives 10% of the branch’s income after deduction of the bonus, but before deduction of income tax.* The income of a particular branch before the bonus and income tax was $165,000. The tax rate was 30%. The bonus amounted to

(a) $12,600


(b) $15,000


(c) $16,500


(d) $18,000

*Uniform CPA Examination question.

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