An Employee Earned $43,300 Working for an Employer in the Current

question 94

Multiple Choice

An employee earned $43,300 working for an employer in the current year.The current rate for FICA Social Security is 6.2% payable on earnings up to $117,000 maximum per year and the rate for FICA Medicare 1.45%.The employer's total FICA payroll tax for this employee is:

• A)$8,950.50.
• B)$5,638.05.
• C)$3,312.45.
• D)$2,684.60.
• E)$0,since the FICA tax is only deducted from an employee's pay.

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Definitions:

Break-Even

The point at which total revenues equal total costs, leading to neither a profit nor a loss.

Contribution Margin

The amount by which a product's sales price exceeds its variable costs, used to cover fixed costs and to generate profit.

Break-Even Point

The point at which total costs and total revenue are equal, resulting in no net loss or gain for a business.

Net Loss

A financial situation that occurs when a company's total expenses exceed its revenues, indicating a negative profit.