Stone Corporation has 25 employees and incurs total wages an

Stone Corporation has 25 employees and incurs total wages and salaries expense of $900,000 per year. The following table shows various payroll amounts as a percentage of this annual wage and salaries expense: In addition, Stone provides group health insurance for its entire workforce. The cost of this insurance is $350 per month per employee 59 Workers compensation insurance Social security and Medicare (employees\' share and employer\'s share combined) Pension and other postretirement costs expense (paid by employer) Personal income taxes withhed Unemployment t 15.38 10 axes expense 2% In addition, Stone provides group health insurance for its entire workforce. The cost of this insurance is $350 per month per employee The company\'s annual payroll-related expenses amount to approximately Select one O a. $1,085,600. O b. $1,181,850. O c. $1,250,700 O d. $900,000.

Solution

1Answer

1. B.$1,181,850

$900,000 + (.05×$900,000) + (.0765×$900,000) + (.05×$900,000) + (.02×$900,000) +($350×12×25) = $1,181,850

2.D.$658800

take home pay or Net salary :

= total salary - Social security and medicare (only employee share is to be considered which means half of 15.3%) - Income tax

= $800000 - (800000 * 15.3% / 2) - (800000 * 10%)

= $800000 - (800000 * 7.65%) - 80000

= $800000 - 61200 - 80000

= $658800