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Tutorial Exercise

National Storage employs $88$ workers with a gross monthly payroll of $$134,000.$ Fringe benefits are $8\mathrm{.}1\%$ of payroll for a profit sharing plan and $$9\mathrm{.}28$ per employee for life insurance.

What percent of payroll is the total cost of fringe benefits? Round your answer to the nearest tenth of a percent.

Step $1$

To calculate the fringe benefit percent, the total amount of fringe benefits is divided by the gross payroll. The first step is to find the cost of the fringe benefits.

There are two fringe benefits offered to employees of National Storage. The first is a profit sharing plan which accounts for $8\mathrm{.}1\%$ of the payroll. As a decimal, we have $8\mathrm{.}1\%=q,.$ Multiply this value and the payroll, $$134,000$ per month, to find the cost of the profit sharing plan.

$costof$ profit sharing plan $=$ gross monthly payroll $$ percent $of$ payroll

$=134,000$

$=$$

The other fringe benefit is for life insurance and is a flat dollar amount of $$9\mathrm{.}28$ per employee. Thus, the total cost of life insurance for the month will be the product of the number of employees receiving this benefit, $88,$ and the cost per employee. Find the cost of life insurance.

$costof$ life insurance $=$ number $of$ employees $costof$ life insurance per employee

$=,9\mathrm{.}28$

$=$$$$