Chapter 8, Problem 2MC

### College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

Chapter
Section

### College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

# Nancy Summers worked 44 hours during the past week. She is entitled to 1½ times her regular pay for all hours worked in excess of 40 during the week. Her regular rate of pay is $15.00. Social Security tax is withheld at the rate of 6.2% and Medicare tax is withheld at the rate of 1.45%; federal income tax withheld is$39; and $5 of union dues are withheld. Her net pay for the week is(a)$593.21.(b) $651.(c)$690.(d) $637.22. To determine Calculate the net pay of Person N. Explanation Net pay: Net pay is the amount of gross pay after deduction of taxes, and any other deductions. Calculate the net pay of Person N. (Figure 1) Note: • Regular pay of the Person N is obtained by multiplying pay rate of Person N with regular working hours for a week (40 hours). Working Note: (1) Calculate overtime rate of pay. TotalÂ rateÂ ofÂ overtime=RegularÂ payÂ rateÂ Â Ã—(1.5Â timesÂ increaseÂ inÂ forÂ hoursÂ workedÂ overÂ 40Â aÂ week)=$15Ã—1

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