Brian, the director of compensation, has been asked by the board of directors to present the "employee cost factor" at the next board meeting. Which of the following calculations does Brian need to do?
A)revenue minus operating expense minus pay and benefits equal adjusted profit divided by pay and benefits
B)total pay and benefits expenditures
C)revenue minus operating expense minus pay and benefits equal adjusted profits divided by FTEs
D)total compensation and benefits divided by FTEs

Question

Quizplus · Accepted Answer

To calculate the employee cost factor, Brian needs to divide the total compensation and benefits by the number of full-time equivalent employees (FTEs). Option D is the closest calculation to this formula. Option A calculates the adjusted profit but does not involve FTEs, option B calculates only the total pay and benefits expenditure without operating expenses, and option C calculates the adjusted profit divided by FTEs but does not include the pay and benefits expenditure in the numerator.

Brian, the Director of Compensation, Has Been Asked by the Board