Green Day Hardware Company’s payroll for November 2014 is summarized below. SEE

Question

Green Day Hardware Company’s payroll for November 2014 is summarized below.

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At this point in the year, some employees have already received wages in excess of those to which payroll taxes apply. Assume that the state unemployment tax is 2.5%. The FICA rate is 7.65% on an employee's wages to $112,700 and 1.45% in excess of $112,700. Of the $264,400 wages subject to FICA tax, $24,000 of the sales wages is in excess of $112,700. Federal unemployment tax rate is 0.8% after credits. Income tax withheld amounts to $16,560 for factory, $6,890 for sales, and $5,790 for administrative. Prepare a schedule showing the employer's total cost of wages for November by function. (Round answers to O decimal places, e.g. 5,275. Do not leave any answer field blank. Enter 0 for amounts.)

Explanation / Answer

Total

Factory

Sales

Administrative

Wages

$ 264,400

$ 184,000

$ 37,200

$ 43,200

FICA

$ 18,739

$ 14,076

$ 1,358

$ 3,305

Federal U.C.

$ 386

$ 352

$ 34

$ 0

State U.C.

$ 1,208

$ 1,100

$ 108

$ 0

$ 284,733

$ 199,528

$ 38,700

$ 46,505

Computation of taxes

Factory

Wages

$ 184,000

Social security taxes (FICA) (7.65% X $184,000)

$ 14,076

Federal unemployment taxes (0.8% X $44,000)

$ 352

State unemployment taxes (2.5% X $44,000)

$ 1,100

Total Cost

$ 199,528

Sales

Wages

$ 37,200

Social security taxes (FICA) {($13,200*7.65%) + ($24,000*1.45%)}

$ 1,358

Federal unemployment taxes (0.8% X $4,300)

$ 34

State unemployment taxes (2.5% X $4,300)

$ 108

Total Cost

$ 33,340

Administrative

Wages

$ 43,200

Social security taxes (FICA) (7.65%*$43,200)

$ 3,305

Federal unemployment taxes

$ 0

State unemployment taxes

$ 0

Total Cost

$ 46,505

Total

Factory

Sales

Administrative

Wages

$ 264,400

$ 184,000

$ 37,200

$ 43,200

FICA

$ 18,739

$ 14,076

$ 1,358

$ 3,305

Federal U.C.

$ 386

$ 352

$ 34

$ 0

State U.C.

$ 1,208

$ 1,100

$ 108

$ 0

$ 284,733

$ 199,528

$ 38,700

$ 46,505

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