An Employee Earned $62,500 During the Year Working for an Employer.The

question 157

Multiple Choice

An employee earned $62,500 during the year working for an employer.The FICA tax rate for Social Security is 6.2% of the first $128,400 of employee earnings per calendar year and the FICA tax rate for Medicare is 1.45% of all earnings.The current FUTA tax rate is 0.6%,and the SUTA tax rate is 5.4%.Both unemployment taxes are applied to the first $7,000 of an employee's pay.What is the amount of total unemployment taxes the employee must pay?

• A)$101.50
• B)$56.00
• C)$378.00
• D)$434.00
• E)$0.00

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Definitions:

Misallocation

The inefficient or inappropriate distribution of resources in a manner that does not maximize economic efficiency or output.

Production Cost

The total expense incurred in the manufacture of a product, including raw materials, labor, and overhead costs.

Black Market

Illegal trade of goods and services, beyond government control, where transactions typically occur “under the table” to avoid taxes or regulations.

Illegal Goods

Products or services whose production, sale, or possession is prohibited by law.