Magnum Plus, Inc., is a manufacturer of hunting supplies. The following is a summary of the companys
Question:
Wages and salaries expense (of which $2,200,000 was withheld from
employees’ pay and forwarded directly to tax authorities) . . . . . . . . . . . . . . . . $7,200,000
Payroll taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 580,000
Workers’ compensation premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250,000
Group health insurance premiums. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 725,000
Contributions to employees’ pension plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450,000
a. Compute Magnum’s total payroll-related costs for the year.
b. Compute the net amount of cash actually paid to employees (their take-home pay).
c. Express total payroll-related costs as a percentage of
(1) Total wages and salaries expense, and
(2) Employees’ take-home pay. (Round computations to the nearest 1 percent.)
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Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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