Faye Is a Marketing Manager for Healthy Corp

question 50

Essay

Faye is a marketing manager for Healthy Corp.She earns a salary of $100,000 and has received the following benefits:
• Healthy pays 75% of all employees' health and accident insurance coverage.Healthy paid $6,000 towards the cost of Faye's health insurance during the year.
• Faye participates in the cafeteria plan and had elected to have $2,000 withheld from her pay to cover the remaining cost of the health insurance premiums and an additional $1,500 to cover dental and other health care costs not paid by insurance (i.e.,funding a flexible spending account).The full $1,500 was used to pay for various qualifying medical costs.
• Healthy pays the cost of disability insurance coverage for all employees.The insurance will pay 75% of salary if employees are out of work for a significant period.The cost of Faye's premiums was $600.
• Healthy pays for the cost of veterinary insurance for all employees.The cost of coverage for Faye's dog was $400.
• Healthy pays for the cost of daycare for its employees' children.The cost for Faye's two children was $8,000.
• All employees receive a 20% discount on Healthy's products.The typical markup on their products is 25%.Faye enjoyed $1,200 of savings through the discount program.
• Faye won the manager of the year award earlier in the year and received an all-expense paid week at a desert spa valued at $3,500.
• Healthy pays Faye's annual membership dues of $500 to the American Marketing Association.
• Healthy paid for the full $2,500 cost of Faye's attendance at the American Marketing Association's annual conference in Orlando.
How much income must Faye recognize from her employment?

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Definitions:

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen, a fundamental concept in economics.

Real Cost

The total cost of manufacturing or providing a service, including all direct and indirect costs.

Marginal Cost

The cost of producing an additional unit of a product, highlighting the concept of increment in total cost with an increase in production.

Tuition

The fee that educational institutions charge for instruction.