An Employee Earned $62,500 During the Year Working for an Employer.The

question 121

Multiple Choice

An employee earned $62,500 during the year working for an employer.The FICA tax rate for Social Security is 6.2% of the first $127,200 of employee earnings per calendar year and the FICA tax rate for Medicare is 1.45% of all earnings.The current FUTA tax rate is 0.6%,and the SUTA tax rate is 5.4%.Both unemployment taxes are applied to the first $7,000 of an employee's pay.What is the amount of total unemployment taxes the employer must pay?

• A)$42.00
• B)$420.00
• C)$378.00
• D)$375.00
• E)$0.00

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Definitions:

Direct Labor-Hours

The total hours worked by employees directly involved in the production process, used as a measure in calculating labor costs and efficiency.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to allocate manufacturing overhead costs to products based on a selected activity base.

Manufacturing Overhead

All manufacturing costs that are not directly tied to the production of goods, such as rent, utilities, and salaries of maintenance personnel.

Total Manufacturing Cost

The aggregate of all costs directly attributable to the production of goods, including material, labor, and overhead costs.