Dallas Corp. employees receive two weeks paid vacation annually. Vacation pay accumulated by company employees equals 4% of each payroll period's payroll. Dallas Corporation's bi-weekly payroll is $200,000. No vacation pay accumulated by employees is forfeited. How much vacation pay expense should Dallas accrue each period?

Question

Quizplus · Accepted Answer

The vacation pay expense is calculated as 4% of each payroll period's payroll. Since the bi-weekly payroll is $200,000, the vacation pay expense for each period is 4% of $200,000, which equals $8,000.