Income Topic Test

Kai had a gross weekly paycheck of $616 last week. Kai worked 6 hours for 4 of the days and 8 hours on 1 day. What is Kai's hourly rate of pay? a. $16.21 b. $19.25 c. $20.53 d. $25.67

(B) $19.25

Tamara earns her living as a salary plus commission employee. Her annual salary is $48,000, and she earns 4% commission on all sales she makes. If Tamara wants to make a total of $6,000 this month, how much in sales does she need to have?

(B) $50,000

Bob gets paid an annual salary of $30,000 and earns 5% commission on all sales he makes. If Bob wants to make $6,000 this month, how much in sales does he need to have? a. $50,000 b. $70,000 c. $90,000 d. $120,000

(B) $70,000

The total amount of deductions from an employee's gross pay is $83.20. If the gross pay is $378.18, what percent of their gross pay is being withheld? a. 21% b. 22% c. 23% d. 24%

(B) 22%

Consider cases where the number of withholding allowances is less than 6. Which will cause the amount of federal income tax withheld to increase? a. Gross pay stays the same and withholding allowances increase. b. Gross pay increases by more than $20 and withholding allowances stay the same. c. Gross pay increases by more than $20 and withholding allowances increase. d. Gross pay decreases by more than $20 and withholding allowances stay the same.

(B) Gross pay increases by more than $20 and withholding allowances stay the same.

Which of the following is an example of a passive income? a. receiving money from selling stocks b. receiving royalties from writing a book c. making money from selling a motorcycle d. making money by getting paid a salary

(B) Receiving royalties from writing a book.

Luce is single and making $763 biweekly. She claims no federal withholding allowances. If the state tax is 19% of the federal tax, how much in state tax does Luce contribute? a. $12.92 b. $15.13 c. $15.77 d. $16.34

(D) $16.34

Marquis has a gross pay of $816. By how much will his gross pay be reduced if Marquis has the following items withheld? federal tax of $92 Social Security tax that is 6.2% of his gross pay Medicare tax that is 1.45% of his gross pay state tax that is 22% of his federal tax a. $82.66 b. $129.13 c. $164.01 d. $174.66

(D) $174.66

The earnings of two employees are given below: Employee A: 6% commission on all sales Employee B: 4% commission on the first $80,000 and 8% on anything over $80,000 How much more does a straight commission employee make than the graduated commission employee for sales of $100,000? a. $1,200 b. $1,600 c. $2,000 d. $3,200

(A) $1,200

Miguel paid a total of $12,000 for stock that was $8 per share. If he sold all his shares for $15,000, how much profit on each share did he make? a. $2 b. $8 c. $10 d. $12

(A) $2

Loretta's income last year was $81,300. She made $56,800 at her salaried job and had additional passive income. If Loretta earned the same amount of passive income each month for the entire year, approximately how much per month was it? a. $2,040 b. $2,125 c. $4,730 d. $6,775

(A) $2,040

Brendon had total job benefits of $39,500 last year. He was required to wear a shirt with the company logo on it for work that he was responsible for buying. Brendon purchased 12 shirts for work during the year at a cost of $23.95 each. He was also required to attend a training at a cost to him of $135. What was Brendon's total employment compensation last year? a. $39,077.60 b. $39,212.60 c. $39,341.05 d. $39,922.40

(A) $39,007.60

KaiLynn has total job benefits of $41,000 per year in her sales job. She pays $63 each month for a cell phone for work. She is also required to purchase samples kits which cost $235 each. If KaiLynn paid for 4 samples kits last year, what was her total employment compensation? a. $39,304 b. $40,060 c. $40,244 d. $42,696

(A) $39,304

Leroy's total job benefits were $50,150 last year. His total job expenses for traveling and for professional development for the year were $3,500. Which of the following represents his total employment compensation? a. $46,650 b. $47,650 c. $50,150 d. $53,650

(A) $46,650

An employee makes an hourly rate plus any tips they earn. This tip employee made a total of $400 by working 28 hours last week. If $253 of their total earnings was their tips, what is their hourly rate of pay? a. $5.25 b. $5.61 c. $8.82 d. $9.04

(A) $5.25

Miguel's employer pays $1,825 in health insurance and $93 in life insurance per year. He also gets $2,860 in paid time off per year. His monthly gross pay is $3,890. What are Miguel's total job benefits per year? a. $51,458 b. $46,680 c. $8,668 d. $4,778

(A) $51,458

Raquel has gross pay of $732 and federal tax withholdings of $62. Determine Raquel's net pay if she has the additional items withheld: Social Security tax that is 6.2% of her gross pay Medicare tax that is 1.45% of her gross pay state tax that is 21% of her federal tax a. $600.99 b. $610.54 c. $641.83 d. $662.99

(A) $600.99

Jasmine has a gross pay of $754.80. By how much will Jasmine's gross pay be reduced if she has the following items withheld? federal tax of $31 Social Security tax that is 6.2% of her gross pay Medicare tax that is 1.45% of her gross pay state tax that is 18% of her federal tax a. $94.32 b. $192.83 c. $224.60 d. $323.11

(A) $94.32

The table below shows the earnings, in thousands of dollars, for three different commissioned employees. A- 2000+3% on all sales December 4.4 January 3.5 February 4.7 B- 7% on all sales December 5.6 January 3.85 February 4.9 C- 5% on the first 40,000+ 8% on anything over 40,000 December 5.2 January 3.6 February 4.4 Which employee did not have the same dollar amount in sales for the month of February as the other two employees?

(A) Employee #1

Juanita receives her paycheck and knows that her gross pay and federal tax are correct. Using the fact that Social Security tax is 6.2% of gross pay, Medicare tax is 1.45% of gross pay and state tax is 19% of federal tax, determine if Juanita's net pay is correct. Regular- $1,020.00 FED WITH- $107.00 SOC WITH- $63.24 MED CARE- $14.79 STATE WITH-$20.33 NET PAY- $814.64

(A) Net pay is correct

Chloe receives her paycheck and knows that her gross pay and federal tax are correct. Using the fact that Social Security tax is 6.2% of gross pay, Medicare tax is 1.45% of gross pay and state tax is 23% of federal tax, determine if Chloe's net pay is correct. Regular- $856.00 FED. WITH. $80.00 SOC. WITH. $53.07 MED CARE. $12.41 STATE WITH. $18.40 NET PAY- $692.12

(A) The net pay is correct

The gross pay, benefits and job expenses for two different employees are shown below. Employee A: gross pay $57,200, employee benefits $5,300, job expenses $800 Employee B: gross pay $56,900, employee benefits $6,200, job expenses $1,400 Which of the following is a true statement? a. The total employment compensations for the two employees are the same. b. The total employment compensation for employee A is less than that of employee B. c. The total employment compensation for employee A is greater than that of employee B. d. The total employment compensations for the two employees can not be compared..

(A) The total employment compensations for the two employees are the same.

Chuck has a gross pay of $815.70. By how much will Chuck's gross pay be reduced if he has the following items withheld? federal tax of $56 Social Security tax that is 6.2% of his gross pay Medicare tax that is 1.45% of his gross pay state tax that is 19% of his federal tax a. $73.04 b. $129.04 c. $235.51 d. $273.38

(B) $129.04

Selina claims single having one exemption. Her state tax deduction is 21% of her federal tax contribution. Calculate the amount of state tax Selina owes if her gross pay for two weeks is $840. The following federal tax table is for biweekly earnings of a single person. a. $16.17 b. $16.80 c. $32.34 d. $33.60

(B) $16.80

An employee has an annual salary of $48,700. They receive $1,530 in health insurance and $2,810 in paid time off per year. They drive their personal vehicle for work which costs them $500 per month, but the company reimburses them $0.53 per mile for the total work miles driven. If the employee drives 9,000 miles for work for the year, what will be their total employment compensation? a. $43,130 b. $51,810 c. $57,810 d. $59,470

(B) $51,810

A graduated commission employee makes 3.5% interest on the first $50,000 in sales and 6.5% interest on all sales over $50,000. Which of the following expressions represents the employee's total earnings on $81,500 in sales? a. (0.035)(50,000) + (0.065)(81,500) b. (0.035)(50,000) + (0.065)(31,500) c. (0.35)(50,000) + (0.65)(31,500) d. (3.5)(50,000) + (6.5)(31,500)

(B) (0.035)(50,000) + (0.065)(31,500)

Mario has gross biweekly earnings of $784.21. By claiming 1 more withholding allowance, Mario would have $13 more in his take home pay. How many withholding allowances does Mario currently claim?a. 3 b. 4 c. 5 d. 6

(B) 4

Mr. Gonzalez earns his living as a salary plus commission employee. His annual salary is $18,000. He makes 4% commission on all of his sales. Mr. Gonzalez wants to earn $60,000 this year. If his earnings are divided evenly throughout the year, how much in monthly sales would Mr. Gonzalez need to have? a. $37,500 b. $87,500 c. $100,000 d. $125,000

(B) 87,500

A tip employee's earnings most closely resemble those of which of the following? a. An employee working on straight commission b. An employee working on commission plus salary c. An employee working on a piece-rate basis d. An employee working on a fixed salary

(B) An employee working on commission plus salary

Elisha is a photographer and charges a set fee to photograph weddings. This is an example of _____ income. a. capital gains b. earned c. hourly d. passive

(B) Earned

If total employee benefits are calculated as a percentage of their gross pay, which of the following employees receives the largest percentage of their gross pay in employee benefits? a. Employee A: gross pay $32,600, total job benefits $33,600 b. Employee B: gross pay $32,900, total job benefits $34,000 c. Employee C: gross pay $33,400, total job benefits $33,900 d. Employee D: gross pay $33,700, total job benefits $34,700

(B) Employee B: gross pay $32,900, total job benefits $34,000

Which of the following employees has the greatest total employee compensation? a. Employee A: total job benefits $68,100 and total job expenses $100 b. Employee B: total job benefits $68,400 and total job expenses $300 c. Employee C: total job benefits $68,700 and total job expenses $800 d. Employee D: total job benefits $69,000 and total job expenses $1,000

(B) Employee B: total job benefits $68,400 and total job expenses $800

The table below shows the typical hours worked by employees at a company. A salaried employee makes $50,000 per year. Hourly employees get paid $20 per hour, but get $30 per hour for each hour over 40 hours. Sun- 0 Mon- 8 Tues- 8 Wed- 9 Thurs- 9.5 Fri- 7.5 Sat- 4 Which of the payment options would you recommend to a new employee?

(B) Hourly pay. Hourly employees make more per week than salaried employees.

Max has a monthly salary of $1,100 and also earns 7.5% commission on his sales. If Max had $43,000 in sales last month, what were his total earnings for the month? a. $3,225 b. $4,050 c. $4,325 d. $5,150

(C) $4,325

Gary earned a gross pay of $1,047.30 last week. Using the fact that Social Security tax is 6.2% of gross pay, determine the amount of Social Security tax deducted from Gary's gross pay. a. $6.49 b. $8.38 c. $64.93 d. $83.78

(C) $64.93

Marisol receives total employee benefits that are 14.5% of her gross annual pay. If Marisol has a gross annual pay of $50,000, how much in total employee benefits does she receive? a. $72.50 b. $725 c. $7,250 d. $57,250

(C) $7,250

Martha earned a gross pay of $1,215.60 last week. Using the fact that Social Security tax is 6.2% of gross pay, determine the amount of Social security tax deducted from Martha's gross pay. a. $7.54 b. $65.37 c. $75.37 d. $75.40

(C) $75.37

Molly has biweekly gross earnings of $839.52. By claiming 1 more withholding allowance, Molly would have $16 more in her take home pay. How many withholding allowances does Molly currently claim?

(C) 3

Which of the following companies offers the greatest total employment compensation? Company A - Gross Pay $41,600 - Paid insurance $1,800 -Paid time off $3,700 -Job Expenses $2,000 Company B -Gross Pay $40,800 -Paid Insurance $2,400 -Paid time off $3,100 -Job Expenses $1,800 Company C -Gross Pay $41,300 -Paid insurance $2,000 -Paid time off $2,800 -Job Expenses $800 Company D -Gross Pay $42,00 -Paid Insurance $2,100 -Paid time off $2,900 -Job expenses $2,500

(C) Company C

The table below shows the earnings, in thousands of dollars, for three different commissioned employees. A- 2000+3% on all sales December 4.4 January 3.5 February 4.7 B- 7% on all sales December 5.6 January 3.85 February 4.9 C- 5% on the first 40,000+ 8% on anything over 40,000 December 5.2 January 3.6 February 4.4 Who had the largest dollar amount in sales for the month of January?

(C) Employee #3

Which of the following employees has the largest gross pay? a. Employee A: Total employee benefits $1,500 Total job benefits $49,800 b. Employee B: Total employee benefits $1,050 Total job benefits $51,200 c. Employee C: Total employee benefits $1,000 Total job benefits $51,900 d. Employee D: Total employee benefits $3,000 Total job benefits $52,300

(C) Employee C: Total employee benefits $1,000 total job benefits $51,900

Marilyn has a biweekly gross pay of $810 and claims 3 federal withholding allowances. Marilyn has all of the following deductions from her gross pay: -federal tax from the following table -Social Security tax that is 6.2% of her gross pay -Medicare tax that is 1.45% of her gross pay -state tax that is 21% of her federal tax Determine how Marilyn's net pay will be affected if she increases her federal withholding allowances from 3 to 4.

(C) Her net pay will increase by $18.15

Padraig receives total employment compensation of $70,000 and had $2,000 in job expenses. Which of the following could be true about Padraig's gross pay and total employee benefits? a. His total employee benefits are 2.8% of his annual gross pay of $72,000. b. His total employee benefits are 2.9% of his annual gross pay of $68,000. c. His total employee benefits are 12.5% of his annual gross pay of $64,000. d. His total employee benefits are 13.3% of his annual gross pay of $60,000.

(C) His total employee benefits are 12.5% of his annual gross pay of $64,000.

The table below shows the typical hours worked by employees at a company. A salaried employee makes $78,000 per year. Hourly employees get paid $26 per hour, but get $39 per hour for each hour over 40 hours. Sun- 0 Mon- 8 Tues- 8.5 Wed- 9.5 Thurs- 10 Fri- 8 Sat- 3 Which of the payment options would you recommend to a new employee?

(C) Salaried Pay. Salaried employees make more per week than hourly employees.

The table below shows the typical hours worked by employees at a company. A salaried employee makes $67,000 per year. Hourly employees get paid $25 per hour, but get $37.50 per hour for each hour over 40 hours. Sun- 0 Mon- 10 Tues- 8 Wed-8 Thurs-7 Fri-6.5 Sat. 4.5 Which of the payment options would you recommend to a new employee?

(C) Salaried pay. Salaried employees make more per week than hourly employees.

Which of these is an example of an employer using benefits to encourage employees to stay with the company? a. The employer provides paid time off, which the employee must use in the calendar year. b. The employer provides benefits which are in line with the standard benefits provided by other employers in the industry. c. The employer matches the amount of money that the employee pays towards Social Security. d. The employer offers stock options, which require the employee to work for a specific amount of time before they vest.

(D) The employer offers stock options, which require the employee to work for a specific amount of time before they vest.

If gross pay increases by $500, total employee benefits increase by $200 and total job expenses decrease by $300, then total employment compensation _____. a. increases by $400 b. increases by $700 c. increases by $800 d. increases by $1,000

(D) increases by $1,000

The table below shows the typical hours worked by employees at a company. A salaried employee makes $78,000 per year. Hourly employees get paid $26 per hour but get $39 per hour for each hour over 40 hours. Sun.- 0 Mon.- 8 Tues.- 8.5 Wed.- 9.5 Thurs.- 10 Fri.- 8 Sat.- 3 Which of the payment options would you recommend to a new employee? a. Either one. Hourly and salaried employees earn the same amount per week. b. Hourly pay. Hourly employees make more per week than salaried employees. c. Salaried pay. Salaried employees make more per week than hourly employees. d. There is not enough information given to compare weekly earnings.

(C) Salaried pay. Salaried employees make more per week than hourly employees.

Scott earns $16.85 per hour at his job. He works 7 hours per day, 4 days per week. What is Scott's gross monthly income for 4 weeks? a. $471.80 b. $943.60 c. $1,415.40 d. $1,887.20

(D) $1,887.20

Athena priced each of her art pieces at the same price and displayed them for sale in two different art shows. She made $495.80 from the first art show and $371.85 from the second show. If Athena sold 7 pieces of art, what price did each piece sell for?

(D) $123.95

Last year Lenny had an annual earned income of $58,475. He also had passive income of $1,255, and capital gains of $2,350. What was Lenny's total gross income for the year? a. $58,475 b. $59,730 c. $60,985 d. $62,080

(D) $62,080

Lauren has gross pay of $765 and federal tax withholdings of $68. Determine Lauren's net pay if she has the additional items withheld: -Social Security tax that is 6.2% of her gross pay -Medicare tax that is 1.45% of her gross pay -State tax that is 22% of her federal tax a. $691.52 b. $666.21 c. $636.98 d. $623.52

(D) $623.52

A statement of an employee's biweekly earnings is given below. FED WITH - $62.00 SOC WITH- $45.06 MED CARE- $10.54 STATE WITH- $12.40 NET PAY - $596.80 What is the employee's gross pay? a. $703.86 b. $714.40 c. $716.26 d. $726.80

(D) $726.80

A statement of an employee's biweekly earnings is given below: FED. WITH. $98.00 SOC. WITH. $52.88 MED CARE. $12.37 STATE WITH. $22.25 NET PAY $667.17 What is the employee's gross pay?

(D) $852.96

Which of the following companies offers the greatest total employment compensation? Company A -Gross pay $38,200 -Insurance $3,500 -Paid time off $4,100 Company B -Gross pay $39,000 -20% of gross pay in total employee benefits -Job expenses $700 Company C -Gross pay $39,900 -Insurance $3,200 -Paid time off $3,900 -Job expenses $1,000 Company D -Gross pay $39,400 -18% of gross pay in total employee benefits

(D) Company D

Choose the method of pay that would result in the most earnings for one month on sales of $60,000. a. Straight commission of 6% on all sales. b. Monthly salary of $1,500 plus 3% commission on all sales. c. Graduated commission of 4% on the first $50,000 in sales and 10% on anything over that. d. Graduated commission of 5% on the first $40,000 in sales and 9% on anything over that.

(D) Graduated commission of 5% on the first $40,000 in sales and 9% on anything over that

A single person earns a gross biweekly salary of $840 and claims 5 exemptions. How will federal taxes affect his net pay? a. Federal taxes will not affect the net pay. b. Net pay will increase $11 from the gross pay. c. Net pay will decrease $11 from the gross pay. d. Net pay will decrease $13 from the gross pay.

(D) Net pay will decrease $13 from the gross pay

Mikah invented and patented a new product which sells in local department stores. This is an example of _____ income. a. capital gains b. earned c. hourly d. passive

(D) Passive