Co. A has 3,000 employees who are each entitled to 8 working days of paid sick...

 

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Co. A has 3,000 employees who are each entitled to 8 working days of paid sick leave for each year. Unused sick leave may be carried forward for 1 calendar year. Sick leave is taken first out of the current year's entitlement and then out of any balance brought forward from the previous year (a LIFO basis). At 31 December 2017, the average unused entitlement is 3 days per employee. Co. A expects, based on past experience, which is expected to continue, that 2,700 employees will take not more than 7 days of paid sick leave in 2018, that 200 employee will take an average of 9 days each and the remaining 100 employees will take an average of 10 days each. The average daily wage for 2018 is expected to be $300. Required: Determine Co. A's expected cost of accumulating paid absences at 31 December 2017. Co. A has 3,000 employees who are each entitled to 8 working days of paid sick leave for each year. Unused sick leave may be carried forward for 1 calendar year. Sick leave is taken first out of the current year's entitlement and then out of any balance brought forward from the previous year (a LIFO basis). At 31 December 2017, the average unused entitlement is 3 days per employee. Co. A expects, based on past experience, which is expected to continue, that 2,700 employees will take not more than 7 days of paid sick leave in 2018, that 200 employee will take an average of 9 days each and the remaining 100 employees will take an average of 10 days each. The average daily wage for 2018 is expected to be $300. Required: Determine Co. A's expected cost of accumulating paid absences at 31 December 2017.

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