Asteria Earned a $25,500 Salary as an Employee in 2017

question 141

Multiple Choice

Asteria earned a $25,500 salary as an employee in 2017. How much should her employer have withheld from her paycheck for FICA taxes (rounded to the nearest whole dollar amount) ?

• A) $1,581
• B) $1,951
• C) $370
• D) $3,902

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Definitions:

Markup Percentage

The percentage by which the cost of a product is increased to determine its selling price.

Direct Materials

Direct materials are raw materials that are directly traceable to the manufacturing of a product and are a significant component of the total manufacturing cost.

Variable Manufacturing Overhead

Costs involved in the manufacturing process that fluctuate with the level of production, such as utility expenses or materials costs.

Absorption Costing

An accounting method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in the cost of a product.