In: Finance
Calculating the cost of Full-Time and Part-Time Employment
In your role as a compensation analyst, you have been assigned to calculate and compare the estimated costs of hiring full-time and part-time employees in anticipation of staffing a project. It will take 100,000 work hours to complete the project, and the project must be completed within a 5-workweek period. The workweek runs Monday through Friday, within the daily hours of 8 am to 4 pm. Full-time workers provide 40 hours of weekly service. Part-time workers provide 20 hours of weekly service. Assume that the hourly wage rate for full-time workers is $20, and the rage is $12 for part-time workers. Both categories of workers perform the same sets of tasks. also , assume that costs of benefits equal the amounts displayed in Table 12-2.
Questions:
12-9. Based exclusively on employing full time workers, (a) How many are needed to complete the project? (b) What is the estimated total cost of wages and benefits?
12-10. Based exclusively on employing part-time workers, (a) How many are needed to complete the project? (b) What is the estimated total cost of wages and benefits?
12-11. Assume that your company has asked you to calculate the cost of staffing the project with a combination of full- and part-time workers? You’ve already hired 15 full-time workers. (a) How many part-time workers should you hire? (b) What is the total cost of wages and benefits based on employing this mix of full- and part-time workers?
Total work hours required | 100,000 | ||
Time in week | 5 | ||
Full time hours per week | 40 | ||
Toal full time hours per employee | 200 | ||
Time in week | 5 | ||
part time hours per week | 20 | ||
Toal full time hours per employee | 100 | ||
Full time employee only | |||
Employee needed | 100000/200 | ||
Employee needed | 500.00 | ||
Total cost | 100000*20 | ||
Total cost | 2,000,000 | ||
Part time employee only | |||
Employee needed | 100000/100 | ||
Employee needed | 1000 | ||
Total cost | 100000*12 | ||
Total cost | 1,200,000 | ||
Mix of full time and Part time employee only | |||
Full time employee | 15 | ||
Hours from full time | 15*200 | ||
Hours from full time | 3,000.00 | ||
Rest work | 100000-3000 | ||
Rest work | 97000 | ||
Employee needed | 97000/100 | ||
Employee needed | 970 | ||
Total cost-full time | 3000*20 | ||
Total cost-full time | 60,000.00 | ||
Total cost-Part time | 97000*12 | ||
Total cost-full time | 1,164,000.00 | ||
Total Cost | 1,224,000.00 | ||