The following payroll information is available for three companies for 2011. Each company has two employees. Assume that the Social Security tax rate is 6 percent on the first \(\$ 110,000\) of earnings and the Medicare tax rate is 1.5 percent on all earnings.

Federal income tax withheld is 15 percent of gross earnings for each employee. The state unemployment tax rate is 3.5 percent and the federal unemployment tax rate is .8 percent on the first \(\$ 7,000\) of earnings per employee.

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Brooks Company Employee No. 1. Hourly Rate $40 Employee No. 2 $20 Brooks Company Regular Hours Overtime Rate Overtime Hours 2,000 2,000 $60 $30 300 100 Other benefits provided for the employees: Medical insurance Pension benefits $250 per month for each employee $100 per month for one employee