Entrepreneurship and Small Business Management

Administering Wages and Salaries

Your business may have wage and salary scales for the positions in the company. You can use the information to compare various jobs or to estimate the cost of giving employees cost-of-living adjustments or merit increases. A cost-of-living adjustment is a raise in your salary to help you keep up with inflation. A merit increase is a raise in your salary to reward you for the quality of your work.

New Salary = Present Salary + Cost-of-Living Adjustment + Merit Increase

1.		Zoe is a heavy equipment operator for Toucan Construction Co. Toucan is giving all its employees a cost-of-living adjustment of 4.5%. Zoe's current salary is $24,000. By what amount will Zoe's salary increase?
			A)	$1,080
			B)	$1,200
			C)	$480
			D)	$4,500
2.		In problem 1, what will Zoe's new salary be?
			A)	$28,500
			B)	$24,480
			C)	$25,080
			D)	$25,000
3.		Zoe's coworker Michelle will receive the 4.5% cost-of-living adjustment next year as well as a $650 merit increase for excellent work this year. Michelle's current salary is $24,000. What will her salary be next year?
			A)	$25,730
			B)	$25,130
			C)	$25,650
			D)	$29,150
4.		Russell's present salary is $13,600. Next year he will receive a 3.5% cost-of-living adjustment and a $1000 merit increase. How much will the cost-of-living adjustment be?
			A)	$476
			B)	$450
			C)	$350
			D)	$375
5.		In problem 4, what will Russell's new salary be?
			A)	$14,000
			B)	$15,076
			C)	$14,950
			D)	$14,725
6.		Mai is a senior systems analyst. Her salary is $38,650. Next year she will receive a 2.4% cost-of-living adjustment and a 4% merit increase. What will be the amount of the merit increase?
			A)	$1,299
			B)	$3,200
			C)	$1,460
			D)	$1,546
7.		In problem 6, what will be Mai's new salary?
			A)	$40,000.72
			B)	$41,123.60
			C)	$39,980.30
			D)	$44,067
8.		Jake currently earns $38,000 per year. Next year, with a cost-of-living adjustment and a merit increase, he will earn $39,500. By what percent will his salary increase?
			A)	96%
			B)	12%
			C)	3.9%
			D)	4.2%
9.		This year, Kari earns $46,750. She will receive a 2.5% cost-of-living adjustment and a merit increase of $950. What will be the amount of the cost-of-living adjustment?
			A)	$1,168.75
			B)	$1,295
			C)	$1,043.50
			D)	$1,128.25
10.		In problem 9, by what amount will Kari's salary increase with both raises?
			A)	$2,000.25
			B)	$2,245
			C)	$2,154.75
			D)	$2,118.75
11.		In problems 9 and 10, by what percent will Kari's salary increase?
			A)	5.6%
			B)	4.5%
			C)	3.2%
			D)	6.9%
12.		Matt earns $12.20 an hour for the Gardening Co. He works 40 hours per week. What are his weekly wages?
			A)	$488
			B)	$480.20
			C)	$467
			D)	$492.60
13.		In problem 12, Matt receives a 5% merit increase. By how much will his weekly wages increase?
			A)	$20.20
			B)	$32
			C)	$22.75
			D)	$24.40
14.		In problems 12 and 13, what will Matt's hourly wage be after the increase?
			A)	$12.61
			B)	$13.20
			C)	$12.81
			D)	$13.10
15.		As a sales clerk, Grace earns $29,400. She receives a cost-of-living adjustment of $600 and a merit increase of $750. What is her new salary?
			A)	$30,050
			B)	$31,050
			C)	$30,750
			D)	$30,900
16.		Clark presently earns $39,200, though he will receive a 4.7% cost-of-living adjustment next year. He is investigating a similar job at a different company, where he would earn $41,100. If he stays with his current company, by how much will his salary increase next year?
			A)	$1,500
			B)	$1,842.40
			C)	$2,025.46
			D)	$1,470.47
17.		In problem 16, will Clark's increased salary next year be more or less than the salary of the other job? By how much?
			A)	More, by $200
			B)	The salaries will be the same.
			C)	Less, by $104.60
			D)	Less, by $57.60
18.		Parker now earns $22,837, but will receive a 2.3% cost-of-living adjustment next year and a 3.7% merit increase. How much will the merit increase be?
			A)	$844.97
			B)	$794.20
			C)	$832.16
			D)	$833.49
19.		In problem 18, how much will Parker's cost-of-living adjustment be?
			A)	$540.50
			B)	$525.25
			C)	$517.92
			D)	$520
20.		In problems 18 and 19, what will Parker's new salary be?
			A)	$24,207.22
			B)	$24,894.09
			C)	$23,220
			D)	$25,016.83