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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.
In addition,Stone provides group health insurance for its entire workforce.The cost of this insurance is $350 per month per employee.
-Some of the payroll-related expenses incurred by Stone Corporation are mandated by law,rather than negotiated with employees.During the current year,these mandated amounts increased Stone's payroll-related expenses by approximately:
A)$ 68,850.
B)$200,700.
C)$131,850.
D)$176,850.

Question

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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.
  In addition,Stone provides group health insurance for its entire workforce.The cost of this insurance is $350 per month per employee.
-Some of the payroll-related expenses incurred by Stone Corporation are mandated by law,rather than negotiated with employees.During the current year,these mandated amounts increased Stone's payroll-related expenses by approximately:
A)$ 68,850. 
B)$200,700. 
C)$131,850. 
D)$176,850.

Quizplus · Accepted Answer

The mandated payroll-related expenses are calculated by adding the specific amounts given for Social Security taxes ($62,000), unemployment taxes ($19,850), and workers' compensation insurance ($50,000). When these amounts are summed up ($62,000 + $19,850 + $50,000), the total is $131,850.

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