A Company Uses Graduated First-Dollar-Of-Profits Formula for Their Profit-Sharing Plans

Multiple Choice

A company uses graduated first-dollar-of-profits formula for their profit-sharing plans.They choose to share 4% of the first $10 million of after-tax profits and 7% of the after-tax profits in excess of that level.If this company's after-tax profit were $15 million last year,how much of this profit would be distributed to the employees?

A) $1,200,000
B) $1,000,000
C) $750,000
D) $600,000