Able Co. provides an incentive compensation plan under which its president receives a bonus equal to 10% of the corporation’s income before income tax but after deduction of the bonus.
If the tax rate is 40% and net income after bonus and income tax was $360,000, what was the amount of the bonus?
A. $36,000
B. $60,000
C. $66,000
D. $90,000

Exercise 2-12 cost behavior; high-low method [lo2-3, lo2-4] speedy parcel service operates a fleet of delivery trucks in a large metropolitan area. a careful study by the company’s cost analyst has determined that if a truck is driven 120,000 miles during a year, the average operating cost is 11.6 cents per mile. if a truck is driven only 80,000 miles during a year, the average operating cost increases to 13.6 cents per mile. required: 1.& 2. using the high-low method, estimate the variable and fixed cost elements of the annual cost of truck operation. (round the "variable cost per mile" to 3 decimal places.)