Miller Company provides a bonus compensation plan under which key employees receive bonuses equal to 10% of Miller's income after deducting income taxes but before deducting the bonus.If income before income tax and the bonus is $400, 000 and the income tax rate is 30%, the bonuses should total

Question

Quizplus · Accepted Answer

Income after income tax = $400,000 x (1-30%) = $280,000
Bonus amount = $280,000 x 10% = $28,000
Therefore, the bonuses should total $28,000.

Miller Company Provides a Bonus Compensation Plan Under Which Key