An Employee Has Gross Earnings of $600 and Withholdings of $45.90

question 64

Multiple Choice

An employee has gross earnings of $600 and withholdings of $45.90 for social security and Medicare taxes and $60 for income taxes. The employer pays $45.90 for social security and Medicare taxes and $4.80 for FUTA. The total cost of this employee to the employer is

• A) $650.70.
• B) $600.00.
• C) $696.60.
• D) $604.80.

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Definitions:

Overhead Cost

Overhead cost refers to ongoing business expenses not directly tied to creating a product or service, such as rent, utilities, and insurance.

Work in Process

Represents goods that are in the process of being manufactured but are not yet complete.

Indirect Materials

Materials used in the production process that do not become an integral part of the final product and are not directly traceable to specific goods.

Nonmanufacturing Costs

Expenses not related to the production of goods, such as selling, administrative, and financial costs.