Suppose that you work at the Peacock Blue store for 40 hours over five days at a rate of $9.25/hour. You then quit your job. Deductions are FICA (7.65%), federal withholding (12%), and state withholding (8%). Your expenses are transportation at $5.25/day, lunch at $3.85/day, and black slacks required for work at $19.95. How much is your discretionary income for the week? (1 point) Responses $324.50 $324.50 $304.55 $304.55 $222.19 $222.19 $202.24
To calculate your discretionary income for the week, we need to subtract your deductions and expenses from your total earnings.
First, let's calculate your total earnings for the week:
Total earnings = Hours worked × Hourly rate
Total earnings = 40 hours × $9.25/hour
Total earnings = $370
Now, let's calculate your deductions:
FICA deduction = Total earnings × FICA rate
FICA deduction = $370 × 7.65%
FICA deduction = $28.305
Federal withholding deduction = Total earnings × Federal withholding rate
Federal withholding deduction = $370 × 12%
Federal withholding deduction = $44.4
State withholding deduction = Total earnings × State withholding rate
State withholding deduction = $370 × 8%
State withholding deduction = $29.6
Next, let's calculate your total expenses for the week:
Transportation expenses = Transportation cost per day × Number of workdays
Transportation expenses = $5.25/day × 5 workdays
Transportation expenses = $26.25
Lunch expenses = Lunch cost per day × Number of workdays
Lunch expenses = $3.85/day × 5 workdays
Lunch expenses = $19.25
Slacks expense = $19.95
Now, let's calculate your discretionary income:
Discretionary income = Total earnings - (FICA deduction + Federal withholding deduction + State withholding deduction + Transportation expenses + Lunch expenses + Slacks expense)
Discretionary income = $370 - ($28.305 + $44.4 + $29.6 + $26.25 + 19.25 + $19.95)
Discretionary income = $370 - $167.805
Discretionary income = $202.195
Rounded to two decimal places, your discretionary income for the week is $202.19.
Therefore, the correct answer is $202.19.