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The table below shows the typical hours worked by employees at a company. A salaried employee makes $\$50,000$ per year. Hourly employees get paid \$20 per hour, but get \$30 per hour for each hour over 40 hours.




Sun.		Mon.TuesWedThurs.FriSat.

0		8899.57.54






Which of the payment options would you recommend to a new employee?


AEither one. Hourly and salaried employees earn the same amount per week.
BHourly pay. Hourly employees make more per week than salaried employees.
CSalaried pay. Salaried employees make more per week than hourly employees.
DThere is not enough information given to compare weekly earnings.

Verified Answer :

  • Calculate the weekly salary by dividing the annual salary (\(\$50,000\)) by \(52\) weeks, which is approximately \(\$961.54\).
  • Calculate the total weekly hours worked (\(46\) hours) and split them into regular (\(40\) hours) and overtime (\(6\) hours) to find the total hourly pay of \(\$980.00\).
  • Compare the two amounts to find that \(\$980.00 > \$961.54\).
  • Conclude that the hourly pay option is better, which corresponds to option B: \(\boxed{B}\).

Explanation

  1. Comparing Weekly Earnings

We need to compare the weekly earnings of a salaried employee and an hourly employee to determine which payment option is better.

  1. The salaried employee earns \(\$50,000\) per year. Assuming there are \(52\) weeks in a year, the weekly salary is:

\[\frac{50000}{52} \approx \boxed{R\$961.54} \text{ per week.}\]

  1. The hourly employee's weekly hours are the sum of the hours worked each day:

\[0 + 8 + 8 + 9 + 9.5 + 7.5 + 4 = 46 \text{ hours.}\]

  1. The hourly pay is split into base pay and overtime pay. For the first \(40\) hours, the rate is \(\$20\) per hour. For the remaining hours (\(46 - 40 = 6\) hours), the rate is \(\$30\) per hour.
  • Base pay: \(40 \times \$20 = \$800\)
  • Overtime pay: \(6 \times \$30 = \$180\)
  • Total hourly weekly pay: \(\$800 + \$180 = \boxed{R\$980.00} \text{ per week.}\] 4. Comparing the two, the hourly weekly earnings (\(\$980.00\)) are greater than the salaried weekly earnings (\(\$961.54\)). Therefore, the hourly pay option is better for the employee.

Examples

This scenario demonstrates the importance of analyzing different compensation structures when evaluating job offers. In many industries, understanding how regular versus overtime hours affect total income helps employees make informed decisions. For example, if a job offers high overtime potential, an hourly rate might be more lucrative than a fixed annual salary, especially during peak seasons. Balancing fixed pay with variable pay is a fundamental skill in personal finance and career management.

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