Score Skateboard Company is a small firm that designs and manufactures skateboards for high school and college students who want effective, fast transportation around campus. Score has two employees who receive $1,100 gross pay per semimonthly pay period and four employees who receive $850 gross pay per semimonthly pay period. The company owner and manager, Christie, needs to determine how much to include in her budget for each employee. Starting in January, Score will be contributing $75 per pay period to each employee's retirement fund. Score is in a state that has a maximum of $7,000 gross pay for SUTA and Score is required to pay 5.4% of the first $7,000 for each employee.

Question

Score Skateboard Company  is a small firm that designs and manufactures skateboards for high school and college students who want effective, fast transportation around campus. Score has two employees who receive $1,100 gross pay per semimonthly pay period and four employees who receive $850 gross pay per semimonthly pay period. The company owner and manager, Christie, needs to determine how much to include in her budget for each employee. Starting in January, Score will be contributing $75 per pay period to each employee's retirement fund. Score is in a state that has a maximum of $7,000 gross pay for SUTA and Score is required to pay 5.4% of the first $7,000 for each employee.

Calculate the cost to Score an employee with $1,100 gross pay in the first period in January.

2. Calculate the cost to Score for an employee with $850 gross pay in the first period in January.

3. Find the total gross semimonthly pay for all six employees and compare this to the total amount Score must include in its budget. How much extra is needed in the budget?

4. Calculate the total amount Score will need for it first quarter FUTA and SUTA deposit. There are six semimonthly pay periods in the first quarter of the year.

MathMate · Answer

Let's summarize the situation.
Company: Score
Total number of employees: 6
Pay period: semi-monthly.

Salary break down:
2 employees at $1100 per pay
4 employees at $850 per pay

Proposed employee retirement fund:
$75 per pay per employee

SUTA contribution (extra expense for Score):
5.4% for first $7000 gross pay
This means that all employees will contribute 5.4% for the first 6 pays if the salary is below 7000/6=$1167, or in the case of Score, all employees.

Calculations:
1. Each employee with $1100 gross salary.
Gross salary = $1100
Retirement fund = $75
SUTA contribution = $1100*0.054=$59.40
Total per employee = $1234.40

2. Each employee with $850 gross salary
Gross Salary = $850
Retirement fund = $75
SUTA contribution = $850*0.054 = $45.9
Total per employee = $850+75+45.9=$970.90

3.
Total gross pay = 2*1100+4*850 = $5600
Total cost to Score = 2*1234.4+4*970.90 = $6352.40
There is a difference of 752.40 in contributions and retirement funds, or 13.4% more.

4. total budget required for first quarter (6 pays)
= 6*6352.40
= $38,114.40