Reference no: EM132516937

Problem 1: Bigelow Company employs 8 staff members who earn an average salary of $42,000 per year each. As part of a profit-sharing plan, each employee receives their monthly salary plus a percentage of the monthly profit. The June payroll expense budget has a total payroll of $34,500 and a budgeted profit of $65,000. Profit for July is budgeted to be $82,000, while purchases of inventory for July are budgeted at $295,000. The purchase of $10,000 in office equipment and $5,000 in furniture are expected to occur in August. How much will each employee earn in salary and profit sharing, in July?

Option A. Each employee will earn $12,961 in salary and bonus in July.

Option B. Each employee will earn $11,700 in salary and bonus in July.

Option C. Each employee will earn $4,525 in salary and bonus in July.

Option D. Each employee will earn $3,592 in salary and bonus in July.

Option E. Each employee will earn $4,313 in salary and bonus in July.