< To illustrate the tax saving that may be realized as a result of making voluntary contributions, consider the following case of Krane mpany, whil is subject to the unemployment compensation law of a state that uses the reserve-ratio formula to determine experience ratings. The following contribution rate schedule applies for 2023: Reserve Ratio 0% to less than 1% Rate 6.2% 1% to less than 1.4% 5.6% 1.4% to less than 1.8% 5.0% 1.8% to less than 2.2% 4.4% 2.2% to less than 2.6% 3.8% 2.6% to less than 3.0% 3.2% 3.0% and over 2.6% For the three 12-month periods ending on June 30, 2022, the company had an average annual taxable payroll of $330,000. This is the base that the state uses as the average payroll. As of June 30, 2022, the credits to the employer's account exceeded the benefits paid by $6,800. Thus, the 2022 reserve ratio is 2.06 percent ($6,800 $330,000), which would result in the assignment of a 4.4 percent tax rate, as shown in the preceding table. If the employer's 2023 total taxable payroll were $390,000, the SUTA contribution would amount to $17,160. If Krane Company makes a voluntary contribution into the state fund within the time period specified by the state law, the tax for 2023 will be less. For example, if the company contributes $460, the reserve ratio will be 2.2 percent ($7,260 $330,000). As a result, the tax rate will be reduced to 3.8 percent, with the following savings realized in 2023: Tax payment with no voluntary contribution (4.4% x $390,000) with sluntary contribution $17,160 t 160 Tax payment with TIO Voronitary contribution Tax payment with voluntary contribution Reserve ratio (3.8% x $390,000) Tax savings 460 2177100 14,820 15,280 $ 1,880 As of June 30, 2021 (the computation date for the 2022 tax rate), Sanchez Company had a negative balance of $1,190 in its unemployment reserve account in State A. The company's average payroll over the last three 12-month periods amounted to $520,000. The unemployment compensation law of State A provides that the tax rate of an employer who has a negative balance on the computation date shall be 7.2% during the following calendar year. Using the tax rate schedule presented below, compute the following: Reserve Ratio Contribution Rate 0.0% or more, but less than 1.0% 6.7% 1.0% or more, but less than 1.2% 6.4% 1.2% or more, but less than 1.4% 6.1% 1.4% or more, but less than 1.6% 5.8% 1.6% or more, but less than 1.8% 5.5% 1.8% or more, but less than 2.0% 5.2% 2.0% or more, but less than 2.2% 4.9% 2.2% or more, but less than 2.4% 4.6% 2.4% or more, but less than 2.6% 4.3% 2.0% or more, but less than 2.2% 4.9% 2.2% or more, but less than 2.4% 4.6% 2.4% or more, but less than 2.6% 4.3% 2.6% or more, but less than 2.8% 4.0% 2.8% or more, but less than 3.0% 3.7% 3.0% or more, but less than 3.2% 3.4% 3.2% or more 3.1% a. The smallest voluntary contribution that Sanchez Company should make in order to effect a change in its tax rate. b. The amount of the tax savings as a result of the voluntary contribution if Sanchez Company's taxable payroll for 2022 is $660,000.