Parley Pharmaceuticals pays its salespeople a base salary of $2,000 per month plus a commission. Each salesperson starts with a commission of 1.5% of total gross sales for the month. The commission is increased thereafter according to seniority and productivity, up to a maximum of 5%. Parley has five salespeople with gross sales for the month of July and commission rates as follows:

The FICA tax rate is 7.65%. In addition, state and federal income taxes of 20% are withheld from each employee.
Required:
1. Compute Parley's total payroll expense (base salary plus commissions) for the month.
2. Compute the total amount of cash paid to employees for compensation for the month.
3. Interpretive Question: Briefly outline the advantages and disadvantages of having no income taxes withheld, but instead relying on individual taxpayers to pay the entire amount of their income tax at the end of the year when they file their taxreturn.

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Commission Rate Gross Sales Jordan Alisa Kasey Trevor Chad S140,000 200,000 110,000 180,000 90,000 3.0% 4.5 5.0 2.5