Suppose that you work at the Peacock Blue store for 40 hours over five days at a rate of $10.25/hour. You then quit your job. Deductions are FICA (7.65%), federal withholding (15%), and state withholding (10%). 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
$364.50
$344.55
$230.63
$210.68
To calculate your discretionary income, we need to first calculate your gross income and then subtract your deductions and expenses.
Gross Income:
$10.25/hour x 40 hours = $410
Deductions:
FICA: 7.65% of $410 = $31.47
Federal withholding: 15% of $410 = $61.50
State withholding: 10% of $410 = $41
Total deductions: $31.47 + $61.50 + $41 = $133.97
Expenses:
Transportation: $5.25 x 5 days = $26.25
Lunch: $3.85 x 5 days = $19.25
Black slacks: $19.95
Total expenses: $26.25 + $19.25 + $19.95 = $65.45
Discretionary Income:
Gross income - Deductions - Expenses = $410 - $133.97 - $65.45 = $210.68
Therefore, your discretionary income for the week is $210.68. The correct answer is $210.68