Choosing Between Incentive PlansBrogdon Is a Ski Instructor Looking for Employment

question 68

Essay

Choosing Between Incentive PlansBrogdon is a ski instructor looking for employment in the Oregon mountains.He has received full-time job offers from two ski lodges,and must choose between them.The two jobs seem equally attractive,so Brogdon wants to choose the lodge which will pay him the higher compensation.Running Elk Lodge offers a wage of $8.00 per hour for a 40 hour week,plus 30% of the fees paid by walk-on pupils desiring private lessons,plus 40% of fees from pupils who specifically request a private lesson from Brogdon.Blustery Ridge Lodge offers a wage of only $6.00 per hour,plus 25% of walk-on private fees,45% of request private fees,and 15% of the fees paid by walk-on groups.Both lodges charge skiers $50 for private lessons and $100 per 5-person group for group lessons.Brogdon's previous experience leads him to expect weekly volume of 15 walk-on privates,6 request privates,and 20 walk-on groups.Required: Which job should Brogdon accept? What factors should Brogdon consider in making his choice?

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Definitions:

Personal Debt

Financial obligations incurred by an individual, as opposed to those owed by companies or governments.

Legal Action

The process of using the formal court system to resolve disputes, enforce laws, or seek redress.

Additional Compensation

Extra payment or benefits given beyond what is originally agreed upon or expected.

Partnership Law

The legal framework that governs the creation, operation, and dissolution of a business partnership, including the rights and responsibilities of the partners.