Larson Company has twenty employees who each earn $120 per day. If they accumulate vacation time at the rate of 1.5 vacation days for each month worked, the amount of vacation benefits that should be accrued at the end of the month is
A) $240.
B) $2,400.
C) $3,600.
D) $360.

Question

Quizplus · Accepted Answer

- Each employee earns $120 per day
- If they work for a month, they earn 1.5 vacation days
- So, for each employee, the vacation benefit accrued for a month = (1.5/30) * $120 * 20 = $36
- For 20 employees, the total vacation benefit accrued for a month = $36 * 20 = $720
- Therefore, the amount of vacation benefits that should be accrued at the end of the month is $720 * 5 (since there are 5 months in a 5 month period). 
- That gives us a total of $3,600.
 
Therefore, option C is the correct answer.

Larson Company Has Twenty Employees Who Each Earn $120 Per