PROBLEM 7-1B Erin Chang, an employee of Solutions Company, worked 48 hours durin

Question

PROBLEM 7-1B Erin Chang, an employee of Solutions Company, worked 48 hours during the week of October 12 through 18. Her rate of pay is $17.50 per hour, and she receives time-and-a-half for all work in excess of 40 hours per week. Chang is married and claims two allowances on her W-4 form. Her wages are subject to the following deductions: a. Federal income tax (use the table in Figure 3, pages 331-332) b. Social Security tax at 6.2 percent. c. Medicare tax at 1.45 percent. d. Union dues, $32. Required Comutehagrgularrepay,gros ay,and net pay.

Explanation / Answer

Normal rate per hour      =       $ 17.5 per hour Overtime rate per hour is 1.5 times of normal rate per hour. Overtime rate per hour    = 17.5*1.5    = $ 26.25 per hour Gross pay      =40*17.5 + 8*26.25=$910 Gross Pay $910.00 Less Federal tax $136.50 Assume federal tax rate is 15% Less Social Security tax $56.42 Less Medicare tax $13.20 Less Union dues $32.00 Net pay $671.89

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