Question

An LPN makes $30,000 per year. The benefits cost for this position is 30% per employee. It takes 2

months for an LPN to become fully productive. This facility has a fairly high turnover rate, as 20
LPN's have quit in the past twelve months.

Answer 1

Answer and Explanation:

The computation of every point is shown below:-

A. Annual pay = $30,000 (given)

B. Percentage of pay benefits × Annual pay

= 30% × $30,000

= $9,000

C. Total employee annual cost = $30,000 + 9,000

= $39,000

D. Number of employees quit in 12 months = 20 (Given)

E. Number of months it takes to being fully productive = 2 (Given)

F. Turnover cost per person is

= $39,000 × (2 ÷ 12) × 0.5

= $3,250

G. Annual turnover for the job is

= 3,250 + 20

= 3,270