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Rockland Corporation has 22 employees and incurs total wages and salaries expense of $800,000 per year.The following table shows various payroll amounts as a percentage of this annual wage and salaries expense:
In addition,Rockland provides group health insurance for its entire workforce.The cost of this insurance is $450 per month per employee.
-The company's annual payroll-related expenses amount to approximately:
A)$1,137,200.
B)$1,076,000.
C)$980,000.
D)$800,000.

Question

[The following information applies to the questions displayed below.]
Rockland Corporation has 22 employees and incurs total wages and salaries expense of $800,000 per year.The following table shows various payroll amounts as a percentage of this annual wage and salaries expense:
  In addition,Rockland provides group health insurance for its entire workforce.The cost of this insurance is $450 per month per employee.
-The company's annual payroll-related expenses amount to approximately:
A)$1,137,200. 
B)$1,076,000. 
C)$980,000. 
D)$800,000.

Quizplus · Accepted Answer

First, we need to calculate the total cost of group health insurance for the entire workforce:

$450/month/employee * 22 employees * 12 months/year = $118,800/year

Next, we can calculate the total annual payroll-related expenses:

$800,000/year * (0.63 + 0.12 + 0.04 + 0.02 + 0.03) = $800,000 * 0.84 = $672,000

Finally, we add the cost of group health insurance to the total annual payroll-related expenses to get the overall annual payroll-related expenses:

$672,000 + $118,800 = $790,800

The closest answer is B) $1,076,000.

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