Section 2.3 Analyzing Pay
79
Strategy
Use the formula:
annual value of job = annual gross pay + total annual employee benefi ts –
job expenses
Solution
Step 1: For job off er number one, determine the total annual employee benefi ts.
Multiply the monthly cell phone allowance by 12 (the number of months in one
year).
total annual employee benefi ts = monthly cell phone allowance × 12
total annual employee benefi ts = $15 × 12
total annual employee benefi ts = $180
Step 2: For job off er number one, determine the total annual job expenses.
Multiply the monthly parking charges by 12 (the number of months in one year).
total annual job expenses = monthly parking charges × 12
total annual job expenses = $45 × 12
total annual job expenses = $540
Step 3: For job off er number one, determine the annual job value. Add the
annual gross pay to the total annual employee benefi ts. Then, subtract the total
annual job expenses.
annual value of job = annual gross pay + total annual employee benefi ts – job
expenses
annual value of job = ($52,220 + $180) – $540
annual value of job = $51,860
Step 4: For job off er number two, determine the total monthly employee
benefi ts. Add the monthly cell phone allowance and the monthly travel
allowance.
total monthly employee benefi ts = monthly cell phone allowance + monthly
travel allowance
total monthly employee benefi ts = $25 + $40
total monthly employee benefi ts = $65
Step 5: For job off er number two, determine the total annual employee benefi ts.
Multiply the total monthly employee benefi ts by 12 (the number of months in
one year).
total annual employee benefi ts = total monthly employee benefi ts × 12
total annual employee benefi ts = $65 × 12
total annual employee benefi ts = $780