The following information is available for Lumberton Co. for the week ending June 28, 2016. All employees are paid time and one-half for all hours over 40. Each employee has cumulative salary of over $7,000, but less than $110,000. Assume the Social Security tax rate is 6 percent on the first $110,000 of wages and the Medicare tax rate is 1.5 percent of total wages. The company contributes the retirement cost to a retirement plan for the employee.

Required
a. Set up a spreadsheet to compute the net pay for each of the above employees. You will need to insert the appropriate Excel formulas.

b. What is the total amount of compensation cost (salary cost plus payroll tax cost) for Lumberton Co. for the week ending June 28, 2016?
c. Lumberton is considering adding group health insurance coverage for its employees to its benefits package. If the average cost of health insurance per employee is $3,900 per year, how much additional cost would be added to weekly compensation cost for Lumberton? Assume the addition of health insurance and re-compute the total compensation cost for Lumberton for the week ending June 28, 2016.

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Contributions to Retirement Plans Rate of Pay Fed WH % 12% 10 10 Employee Hours Jillian Carl Yolanda $15 per hour 18 16 32 46 45 $20 per week 10% of gross pay 10% of gross pay Rate of Pay Regular Hours Overtime Rate Overtime Hours Gross Pay 3 Emplo 4 Jillian 5 Carl 6 Yolanda $22.50 $27.00 $24.00 $15.00 40 40 $16.00 Gross Pay Social Mediare Fed WH Amt. 9 Em 10 Jillian 11 Carl 12 Yolanda 13 14 15 Compensation Cost for Lumberton Co 16 Salary Expense 17 Jillian 18 Carl 19 Yolanda 20 21 Payroll Tax Expense 22 Jillian 23 Carl 24 Yolanda 25 26 Retirement Contributions: 27 Jillian Net Pa