Chester Corp. is downsizing the size of their workforce by 10% (to the nearest person) next year from various strategic initiatives. How much will the company pay in separation costs if each worker receives $5,000 when separated?

$293,500

Explanation:

The computation of the amount pay in separation cost is shown below:

As there are 587 employees

but 10% are downsized

So, separation cost is

= Current employees × downsized percentage × received amount by workers

= 587 employees × 10% × $5,000

= $293,500

We simply applied the above formula so that the amount pay by the company with respect to the separation cost could arrive