An Employee Earned $43,300 Working for an Employer in the Current

question 190

Multiple Choice

An employee earned $43,300 working for an employer in the current year. The current rate for FICA Social Security is 6.2% payable on earnings up to $118,500 maximum per year and the rate for FICA Medicare 1.45%. The employer's total FICA payroll tax for this employee is:

• A) $3,312.45.
• B) $5,638.05.
• C) $8,950.50.
• D) $2,684.60.
• E) $0, since the FICA tax is only deducted from an employee's pay.

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Definitions:

Income Changes

Alterations in a company's earnings or an individual's income, which may result from different factors like operational adjustments, market conditions, or policy changes.

Inventory Levels

Inventory levels refer to the quantity of goods and materials on hand at any given time within a business.

FIFO Cost

First In, First Out cost method, an inventory valuation method where the goods first purchased or produced are the first to be sold, affecting the value of inventory on hand and cost of goods sold.

Periodic Inventory

An inventory system where a company physically counts its inventory at specific intervals to determine the cost of goods sold and ending inventory levels.