When Calculating the Employee's Payroll, the Clerk Forgot About the Wage

question 11

Multiple Choice

When calculating the employee's payroll, the clerk forgot about the wage base limits. What impact could this error cause on the employee's check?

• A) FICA-OASDI could be overstated.
• B) FUTA could be overstated.
• C) SUTA could be overstated.
• D) All of these could be correct.

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Definitions:

Product Costs

Product costs are the costs directly associated with the manufacturing of goods, including materials, labor, and overhead.

Period Costs

These are costs that are not directly tied to production and are expensed in the period they are incurred, such as selling, general, and administrative expenses.

Factory Overhead

All indirect costs associated with manufacturing, such as indirect labor, maintenance, and utilities, not directly tied to a specific product.

Direct Labor Hours

The total number of work hours spent by employees who directly manufacture or produce goods.