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Stone Corporation has 25 employees and incurs total wages and salaries expense of $900,000 per year.The following table shows various payroll amounts as a percentage of this annual wage and salaries expense: In addition,Stone provides group health insurance for its entire workforce.The cost of this insurance is $350 per month per employee.
In addition,Stone provides group health insurance for its entire workforce.The cost of this insurance is $350 per month per employee.
-The company's annual payroll-related expenses amount to approximately:
A)$1,085,600.
B)$1,181,850.
C)$1,250,700.
D)$900,000.

Question

[The following information applies to the questions displayed below.]
Stone Corporation has 25 employees and incurs total wages and salaries expense of $900,000 per year.The following table shows various payroll amounts as a percentage of this annual wage and salaries expense: In addition,Stone provides group health insurance for its entire workforce.The cost of this insurance is $350 per month per employee.
  In addition,Stone provides group health insurance for its entire workforce.The cost of this insurance is $350 per month per employee.
-The company's annual payroll-related expenses amount to approximately:
A)$1,085,600. 
B)$1,181,850. 
C)$1,250,700. 
D)$900,000.

Quizplus · Accepted Answer

Total payroll expenses = wages and salaries expense + group health insurance expense
Wages and salaries expense = $900,000 
Group health insurance expense = $350 * 25 employees * 12 months = $105,000
Total payroll expenses = $900,000 + $105,000 = $1,005,000
Adding the amount for employer payroll taxes and benefits, we get:
$1,005,000 + $176,850 + $0 + $0 = $1,181,850

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