10-3 First Foreign Auto Parts Ryan Larson, owner of First Foreign Auto Parts, is considering ex- panding his operation for the new year by rebuilding shock absorb- ers. This will require two additional full-time employees. Because of a tight labor market, Ryan presumes he will have to pay $13 per hour, along with health insurance, to attract quality employees. He decides he will contribute 50% towards the $460 monthly health insurance individual premium, in addition to the federal and state o 1935 UJU unemployment taxes and Medicare and Social Security taxes that he must pay on the employees' behalf. Ryan needs to decide how much to include in his budget for each employee. 1. Based on a 40-hour work week, calculate the cost to First Foreign Auto Parts for each employee in the first month in January. 2. Ryan hires a new employee at $13 per hour to rebuild shock absorbers. The employee is married, claims no withholding allowances, and needs the individual health coverage. Calculate his weekly take-home pay, assuming he works 40 regular hours and 10 overtime hours, and pays 29% of his gross earnings for court-ordered child support. His health insurance premiums can be paid with pre-tax dollars. Use Figure 10-3 to determine the federal tax to be withheld. 3. Ryan is considering a differential piecework rate to give his new employees incentive to produce more and increase their wages. Ryan came up with the following schedule: Shocks assembled per week Pay per shock First 40 shocks $6.50 Next 40 shocks $7.50 Over 80 shocks $8.50 How much would each employee make for completing 75 shocks per week? How much more would each employee make by complet- ing just 15 additional shocks per week beyond the first 75 shocks? 10-3 First Foreign Auto Parts Ryan Larson, owner of First Foreign Auto Parts, is considering ex- panding his operation for the new year by rebuilding shock absorb- ers. This will require two additional full-time employees. Because of a tight labor market, Ryan presumes he will have to pay $13 per hour, along with health insurance, to attract quality employees. He decides he will contribute 50% towards the $460 monthly health insurance individual premium, in addition to the federal and state o 1935 UJU unemployment taxes and Medicare and Social Security taxes that he must pay on the employees' behalf. Ryan needs to decide how much to include in his budget for each employee. 1. Based on a 40-hour work week, calculate the cost to First Foreign Auto Parts for each employee in the first month in January. 2. Ryan hires a new employee at $13 per hour to rebuild shock absorbers. The employee is married, claims no withholding allowances, and needs the individual health coverage. Calculate his weekly take-home pay, assuming he works 40 regular hours and 10 overtime hours, and pays 29% of his gross earnings for court-ordered child support. His health insurance premiums can be paid with pre-tax dollars. Use Figure 10-3 to determine the federal tax to be withheld. 3. Ryan is considering a differential piecework rate to give his new employees incentive to produce more and increase their wages. Ryan came up with the following schedule: Shocks assembled per week Pay per shock First 40 shocks $6.50 Next 40 shocks $7.50 Over 80 shocks $8.50 How much would each employee make for completing 75 shocks per week? How much more would each employee make by complet- ing just 15 additional shocks per week beyond the first 75 shocks
