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Problems 5. Determine the annual cost, average hourly cost, and burden markup of an hourly employee given the infor- mation in Table 8-1. Assume the employee takes full advantage of the 401(k) benefit. The employee's health insurance is paid for entirely by the employer. Last year the employee worked 2,104 hours and was paid for an additional 80 hours of vacation. The employee was paid for at least 40 hours each week and is to be paid time and a half on any work over 40 hours per week. Table 8-1 Wage Information for Problem 5 Item Wages Bonus Allowances Social Security Medicare FUTA SUTA Workers' Comp. General Liability 401(k) Health Insurance Cost $22.00/hr $500 None 6.2% of wages to $128,700 1.45% of wages 0.6% of wages to $7,000 2.0% of wages to $20,000 $0.85 per $100 of wages 0.65% of wages 50% match up to 6% of wages $200/month

Answer 1

Calculate the Annual cost Wages on The employee will be paid $22 per hour 2080 hours (52 weeks x uo hours per week? Number of hours vacation schours No. of hours of time worket = 2000 hr (2080-sobra) last year employee worket 2104 hours & was paid for an additional so hours for an of vacation. The remaining hours are 104 hours aloubys -dooohn) - Calou hours of work & sohrs of 2080 ha paid vacation regularly ) Wages = (2080 hrs) (22/hour) + (lou hours) ( $22015) + Sno S4560 + lyg +500 = $47404 Calwlatrog of social security Social security Gail of wages to $128.400 Social security 2 0.062($44404) $2939

Calculate Medicare expenses Medicare = $ 47404 X 0.0145 $687358 - Calwlate furo (Federal unemployment tor) FUTA = $47404 x 0.6 l. $ 284.424 Calwlate SUTA (State Unemployment Tax) SUTA = $474ou X 0.02 = $948-08 Calculate worker compensation $0.085 $ 474ou X $100 $ 402-93 Calculate general liability General liability -0.65*$44404 $308.126 Calculate 401(k) plan Employee takes full advantage of walk) bencht noi(c) = Co.sx0.06) CB47404) $ 1422:12 Total annual cost = $uruout $2939+ $687 358 +$ 284,424 + 4948.08 + $402.93+ $308126 +1422.12 $ 54396.038 page to

Calwlate Average hourly cost Hourly cost can be calculated by using - Total cost Hours worked = $ 54396-038 2louhrs = $25.85 Calculate the burden mark-up of an hourly employee.. Burden markup Total cost Wages Gorel) - Wages Borus $ 54396038 $4 7404 - $960 - $500 0.1839 (or) 18.39.1.