Using the Information Below, Determine the Amount of the Payroll

question 22

Essay

Using the information below, determine the amount of the payroll tax expense for B. Hope Company's first payroll of the year. In your answer list the amounts for FICA (OASDI and Medicare), SUTA, and FUTA. Assume:
FICA tax rates are: OASDI 6.2% on a limit of $128,400 and Medicare 1.45%.
State Unemployment tax rate is 5.0% on the first $7,000.
Federal Unemployment tax rate is 0.8% on the first $7,000.

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Definitions:

Economies of Scale

Refers to the cost advantage that arises with increased output of a product, leading to a reduction in the per-unit cost.

Production Process

A sequence of steps or operations involved in the manufacture of goods or the delivery of services.

Minimum Efficient Scale

The smallest scale of production a firm can achieve while still taking full advantage of economies of scale.

Production Expertise

Specialized knowledge or skills in the process of creating goods or services.