If fairness only is considered, if a unit manager's unit is doing well, the unit manager prefers:

Multiple Choice

• An informal evaluation.

• A firm-wide pool over a unit-based pool.

• A subjective measure.

• A unit-based pool over a firm-wide pool.

• Not to be evaluated.

Fringe benefits include all of the following except:

Multiple Choice

• Life insurance.

• Membership in a fitness club.

• Medical benefits.

• Performance shares.

• Travel.

Ben Johnson is the manager of the jewelry department of a large chain of department stores. The department store has succeeded on the basis of customer service and quality of merchandise. As a manager, Ben is compensated with a salary of $200,000 and a bonus based on his units income. The bonus pool is 10% of companywide net income. When the units return on invested assets exceeds the rate of return of the whole company, the unit manager is included in the bonus pool; the bonus pool is divided evenly among the managers that qualify for the bonus. Selected information about the department store and Bens performance is as follows. Customer service is measured on a 6-point scale, with 6 being the highest rating; quality of service is measured on a 10-point scale, with 10 being the highest rating. In the current period, 25 managers qualified for the bonus, including Ben.

	Jewelry Department			Whole Company
Stock price				$	42
Net income	$	1,898,000		$	16,500,000
Assets invested	$	22,500,000		$	287,500,000
Customer service		4			5
Quality of service		4			8
Total revenue	$	3,500,000		$	123,600,000

Required:

Based on the above information, what is the amount of total compensation for Ben?

multiple choice

• $200,000

• $268,750

• $266,000

• $282,000