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Amazon Appliance Company has three installers. Larry earns $355 per
week, Curly earns $460 per week, and Moe earns $585 per week. The
company's SUTA rate is 5.4%, and the FUTA rate is 6.2% minus the SUTA.
As usual, these taxes are paid on the first $7,000 of each employee's
earnings.


a. How much SUTA and FUTA tax does Amazon owe for the first quarter of the year?



Answer :

iGreen
There are approximately 13 weeks in a quarter of a year, so we can multiply this to find out how much all 3 of them earn in a quarter of a year.

[tex]\sf355\times13=\sf\$4615[/tex]
[tex]\sf460\times13=\sf\$5980[/tex]
[tex]\sf585\times13=\sf\$7605[/tex]

Now find the SUTA by multiplying the rate(5.4%) to these numbers.

[tex]\sf4615\times0.054=249.21[/tex]
[tex]\sf5980\times0.054=322.92[/tex]
[tex]\sf7605\times0.054=410.67[/tex]

Add them up to find the total SUTA tax.

[tex]\sf249.21+322.92+410.67=\boxed{\sf\$982.80}[/tex]

Now subtract the 6.2% rate from the SUTA rate.

[tex]\sf6.2\%-5.4\%=0.8\%[/tex]

So we can multiply 0.8% to the prices for the first quarter of the year.

[tex]\sf4615\times0.008=36.92[/tex]
[tex]\sf5980\times0.008=47.84[/tex]
[tex]\sf7605\times0.008=60.84[/tex]

Add them up to find the total FUTA tax.

[tex]\sf36.92+47.84+60.84=\boxed{\sf\$145.60}[/tex]

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