An Employee Earned $4,600 in February Working for an Employer

question 91

Multiple Choice

An employee earned $4,600 in February working for an employer.Cumulative earnings of the previous pay periods are $4,800.The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%.The current FUTA tax rate is 0.6%,and the SUTA tax rate is 4.4%.Both unemployment taxes are applied to the first $7,000 of an employee's pay.What is the amount the employer should record as payroll taxes expense for the month of February?

• A)$581.90
• B)$110.00
• C)$351.90
• D)$461.90
• E)$230.00

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Definitions:

Salespeople Commissions

The payment made to sales staff, usually calculated as a percentage of the sales they generate.

Activity-Based Costing

Activity-based costing is an accounting method that assigns costs to products and services based on the resources they consume, aiming for more accurate cost information.

Overhead Rate

A measure used to allocate indirect costs to produced goods or services, calculated as overhead costs divided by the allocation base.

Job Order Cost System

An accounting system that accumulates costs by individual jobs when the products or services are distinguishable from each other.