7. 1-19 Points) DETAILS MY NOTES BRTCMAC9 9.1.029. ASK YOURT In an eflort to keep low-wage workers' salarios commensurale with the cost of livieg, a mumber of states have amended their constit dinm to allow the minimum wage to be adjusted with inflation. You are the accountant for a company that owns a chain of 14 fast food restaurants in a stato which adjusts the minimum wage for inflation. Each restaurant emplovs 55 workers, each averging 201 weck at the current lederal minimum wage, $$ \$ 7.25 $$ per hour. (a) How many hours at minimum wage are paid out each week ly the company? $$ \square $$ hr (b) A the current rate of $$ \$ 7.25 $$ per hour, what is the amount (in $$ \$ $$ ) of the weekly "minimum wage" portion of the restatrant's payroll? $$ \$ $$ $$ \square $$ (c) If the inflation rate this year is $$ 0.9 \% $$, calculate the "adjusted" minimum wace rate (in $$ \$ $$ per hour) to be paid nert year. (Round your answer to two dedmal places.) \$ $$ \square $$ per hour (d) How much in "additional wages" will the company have to pay out next year at the adjustenata (in $$ \$ $$ )" (Round your answer to the nearest dalldr.) \$ $$ \square $$ (e) Suggest some ways that the restaurant chain or other small businesses can oflset the ircrease in parrell and subsequent decrease in profit as a resuit of the minimum wage hike. $$ \square $$

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UpStudy AI · Accepted Answer

**(a)**  
Each restaurant has 55 workers working 20 hours per week, so one restaurant clocks  
$$
55 \times 20 = 1100 \text{ hours per week.}
$$  
For 14 restaurants, the total is  
$$
14 \times 1100 = 15400 \text{ hours per week.}
$$

**(b)**  
At a rate of $$\$7.25$$ per hour, the weekly minimum wage payroll is  
$$
15400 \text{ hours} \times \$7.25/\text{hour} = \$111650.
$$

**(c)**  
An inflation rate of $$0.9\%$$ implies that the adjusted minimum wage is  
$$
\$7.25 \times (1 + 0.009) = \$7.25 \times 1.009 \approx \$7.31525.
$$  
Rounded to two decimal places, the new minimum wage is  
$$
\$7.32 \text{ per hour.}
$$

**(d)**  
The additional cost per hour is  
$$
\$7.32 - \$7.25 = \$0.07.
$$  
With a total of 15400 hours per week, the extra weekly wage cost is  
$$
15400 \times \$0.07 = \$1078.
$$

**(e)**  
Some ways to offset the increase in payroll costs include:  
- Increasing menu prices slightly to pass some of the cost to consumers.  
- Improving efficiency or reducing waste in operations to cut other expenses.  
- Investing in employee training or technology that increases productivity.  
- Adjusting staff scheduling or reducing nonessential labor hours where possible.  
- Exploring options for automating certain tasks to reduce dependency on low-wage labor.
**(a)** The company pays out **15,400** hours of minimum wage each week. **(b)** The weekly minimum wage payroll is **\$111,650**. **(c)** The adjusted minimum wage next year is **\$7.32** per hour. **(d)** The company will need to pay an additional **\$1,078** in wages next year. **(e)** To offset the increased payroll costs, the restaurant chain can: - Raise menu prices slightly. - Improve operational efficiency to reduce expenses. - Invest in employee training or automation to increase productivity. - Adjust staffing schedules to minimize unnecessary labor costs.

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