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An employee's monthly gross pay is $4,000. Federal unemployment insurance is 0.8% and state unemployment insurance is 5.4% of gross pay. What is the combined unemployment insurance the employer owes for the month?
A$32
B$216
C$248
D$306
Answer & Solution
Correct answer: C. $248
1. Federal unemployment: \$4{,}000 \times 0.8\% = \$32.
2. State unemployment: \$4{,}000 \times 5.4\% = \$216.
3. Combined: \$32 + \$216 = \$248.
4. Option A and B are each single components; the question asks the combined total.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §5.2 "Payroll", p.213_
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