Action Travel Has 10 Employees Each Working 40 Hours Per

question 56

Multiple Choice

Action Travel has 10 employees each working 40 hours per week and earning $20 an hour.Federal income taxes are withheld at 15% and state income taxes at 6%.FICA taxes are 7.65% and unemployment taxes are 3.8% of the first $7,000 earned per employee.What is the total payroll tax expense for the first week of January?

• A)$612.
• B)$1,224.
• C)$916.
• D)$304.

---

Definitions:

Freight-in

represents the cost of transporting goods into a business, typically considered as part of the cost of goods sold.

Operating Expense

An expense that a business incurs through its normal business operations, often including items like rent, utilities, and payroll.

Accrual System

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when cash is exchanged.

Revenue

The complete sum of earnings derived from selling goods or offering services that are central to a company's core business.