Grammy's Bakery Had the Following Information for the Pay Period

question 112

Multiple Choice

Grammy's Bakery had the following information for the pay period ending June 30: $$\begin{array} { | l | c | c | r | c | c | } \hline \begin{array} { c } \text { Employee } \\\text { Name }\end{array} & \begin{array} { c } \text { Pay } \\\text { rate }\end{array} & \begin{array} { c } \text { Hours } \\\text { worked }\end{array} & \begin{array} { c } \text { Cumulative } \\\text { earnings }\end{array} & \text { Department } & \begin{array} { c } \text { Federal } \\\text { income tax } \\\text { withheld }\end{array} \\\hline \text { P. Ganster } & \$ 2,000 & \text { Salaried } & \$ 12,000 & \text { Kitchen } & \$ 86.00 \\\hline \text { T. Baker } & 10.00 / \mathrm { hr } & 50 & 6,500 & \text { Office } & 22.00 \\\hline\end{array}$$ $$\text { Assume : }$$ FICA-OASDI applied to the first $106,800 at a rate of 6.2%.
FICA-Medicare applied at a rate of 1.45%.
FUTA applied to the first $7,000 at a rate of 0.8%.
SUTA applied to the first $7,000 at a rate of 5.6%.
State income tax is 3.8%.
Given the above information,what would be the amount applied to Kitchen Salaries Expense?

• A)Debit $12,000
• B)Credit $12,000
• C)Debit $2,000
• D)Credit $2,000

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Definitions:

Optimal Fee

The best possible charge for a service or product that maximizes profit without discouraging consumers from buying.

Profitability

The degree to which a business or activity yields profit or financial gain.

Marginal Benefit

The additional satisfaction or utility that a person receives from consuming one more unit of a good or service.

Marginal Social Cost

The additional cost to society of producing one extra unit of a good or service.