Gary Marks Is Paid on a Monthly Basis

question 103

Multiple Choice

Gary Marks is paid on a monthly basis.For the month of January of the current year,he earned a total of $8,288.FICA tax for Social Security is 6.2% on the first $127,200 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings.The 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.The amount of Federal Income Tax withheld from his earnings was $1,375.17.What is the amount of the employer's payroll taxes expenses for this employee? (Round your intermediate calculations to two decimal places.)

• A)$2,009.21
• B)$1,131.31
• C)$2,506.48
• D)$420.00
• E)$1,054.04

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Definitions:

Service Department Expenses

Costs incurred by the service departments within a company, which support the production or operations but do not directly produce goods.

Income from Operations

The profit generated from a company's core business operations, excluding income from other sources and expenses unrelated to operations.

Profit Margin

A financial metric indicating the percentage of revenue that exceeds the costs associated with making or selling goods and services, showing profitability.

Activity Base

This term is associated with cost accounting and refers to a measure of activity that is used as a basis for allocating costs to cost objects.