eom3 15% budget for TCF
It was stated in the problem that:
The Chocolate Factory has established a budget of 15% of aggregate employee earnings each year, beginning in 2006, to provide pensions for its employees. Management has indicated that a future contribution rate in excess of 18% in any one year would not be affordable.
One of the worksheets provided (with the employee data on tab [Contribution Summary]) calculates the aggregate annual contribution for TCF. This seems to be based upon the 2006 snapshot and in 2006 TCF will pay approximately 10% of the current salaries. Salaries and contribution rate will vary over time...
How would one verify that each and every year would be under the cap of 18%?