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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.


AHow much SUTA and FUTA tax does Amazon owe for the first quarter of the year?

Verified 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.

\(\sf355\times13=\sf\$4615\)
\(\sf460\times13=\sf\$5980\)
\(\sf585\times13=\sf\$7605\)

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

\(\sf4615\times0.054=249.21\)
\(\sf5980\times0.054=322.92\)
\(\sf7605\times0.054=410.67\)

Add them up to find the total SUTA tax.

\(\sf249.21+322.92+410.67=\boxed{\sf\$982.80}\)

Now subtract the 6.2% rate from the SUTA rate.

\(\sf6.2\%-5.4\%=0.8\%\)

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

\(\sf4615\times0.008=36.92\)
\(\sf5980\times0.008=47.84\)
\(\sf7605\times0.008=60.84\)

Add them up to find the total FUTA tax.

\(\sf36.92+47.84+60.84=\boxed{\sf\$145.60}\)

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