Frank Flynn is the payroll manager for Powlus Supply

Company #6875
Frank Flynn is the payroll manager for Powlus Supply Company. During the budgeting process,
Sam Kinder, director of finance, asked Flynn to arrive at a set percentage that could be applied
to each budgeted salary figure to cover the additional cost that will be incurred by Powlus
Supply for each employee. After some discussion, it was determined that the best way to
compute this percentage would be to base these additional costs of payroll on the average
salary paid by the company.Kinder wants this additional payroll cost percentage to cover payroll
taxes (FICA, FUTA, and SUTA) and other payroll costs covered by the company (workers'
compensation expense, health insurance costs, and vacation pay).Flynn gathers the following
information in order to complete the analysis:Average annual salary ...................... $24,000FICA
rates ....................................... 6.2% and 1.45%FUTA............................................... 0.6% on 1st
$7,000SUTA............................................... 3.3% on 1st $10,400Workers' compensation
costs.......... $0.97 per $100 of payrollHealth insurance costs..................... $75.15 per
monthVacation pay earned....................... 2 weeks' pay earned each year to be used in
following yearCompute the percentage that can be used in the budget.View Solution:
Frank Flynn is the payroll manager for Powlus Supply Company

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