An Employee Earned $47,000 During the Year Working for an Employer.The

question 9

Multiple Choice

An employee earned $47,000 during the year working for an employer.The FICA tax for social security is 6.2%,and the FICA tax for Medicare is 1.45%.The employee's share of FICA taxes is:

• A)$681.50.
• B)$2,914.00.
• C)$3,595.50.
• D)$7,191.00.
• E)Zero,since the employee's pay exceeds the FICA limit.

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Definitions:

Straight-line Depreciation

A technique for distributing the expense of a physical asset evenly over its lifespan in yearly amounts.

Spare Parts

Components kept on hand for the purpose of replacing failed or worn-out parts in order to maintain the functioning of machinery or equipment.

Equivalent Annual Cost

A financial analysis tool used to compare the cost-effectiveness of two or more investment projects with differing lifespans by calculating the annual cost of each project over its life.

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment’s cost.