Chapter.3 Full Test Bank Gross Pay Computation

Gross pay is the amount of employee compensation prior to deducting any amounts for taxes or other withholdings.

Salaried employees may be classified as nonexempt.

A firm is always exempt from FLSA provisions if it has fewer than 5 employees.

The tipped minimum wage is $2.13 per hour for all states.

Federal policy explains clear differences between exempt and nonexempt employees.

To compute the hourly rate for an employee with a 40-hour standard workweek, you would divide the annual salary by 2,080.

Piece-rate pay is used for employees who participate materially in the sale of manufacturing components.

The hundredth-hour system promotes more accuracy in employee time collection than the quarter-hour system.

Any employee may request a payroll draw against future earnings.

Compensatory time is only federally mandated for public salaried exempt employees.

Nonexempt employees are usually workers who:

A. 

Routinely supervise other employees.

B. 

Are exempt from certain company rules.

C. 

Occupy executive positions in the company.

D. 

Perform operative level tasks.

Which of the following automatically exempts an employer from FLSA provisions (Select all that apply)?

A. 

The firm has annual volume of less than $500,000.

B. 

The firm is a school for physically handicapped children.

C. 

The firm is a governmental agency.

D. 

The firm conducts no interstate commerce.

The difference between the federal minimum wage and the tipped wage involves:

A. 

The type of work the employee performs.

B. 

An employee’s qualifications for the job.

C. 

The size of the town in which the employers is located.

D. 

Supervisory reviews about the employee’s performance.

Which of the following is always true about tipped employees?

A. 

The minimum wage for tipped employees is consistent among all states.

B. 

They have the opportunity to earn tips from patrons as a regular part of their job.

C. 

They only earn occasional tips from other employees.

D. 

They must earn more than 50% of their income from tips.

Vincent is a tipped employee who earns a wage of $2.13 per hour in a tip-credit state and works a standard 40-hour workweek. Last week, he earned $60 in tips. Which of the following is true?

A. 

B. 

Vincent’s employer may not report his tips for income tax purposes.

C. 

Vincent’s employer must pay him the tip credit because his wages and tips for the week were less than the federal minimum wage.

D. 

Vincent must file a request with his employer to have the tip credit applied to his wages for the week.

Cole is a minimum wage employee in Santa Fe, NM, where the minimum wage is $10.91 per hour. His employer claims that since the federal minimum wage is $7.25 per hour, Cole should only receive the federal amount. What is the correct answer in this situation?

A. 

B. 

C. 

The employer is correct that the federal minimum wage overrules the state wage.

D. 

The employer must pay the state-designated minimum wage for the area.

Paloma is a 16-year old who babysits for a local family on an occasional basis. During a calendar year, she earned $1,250 in babysitting wages. What is true about Paloma’s wages?

A. 

B. 

C. 

D. 

Since the family conducts no interstate commerce, FLSA provisions cannot apply.

As of December 2016, the minimum wage for salaried employees is:

A. 

$893/week.

B. 

$903/week.

C. 

$913/week.

D. 

$923/week.

Which of the following is true about salaried employees (Select all that apply)?

A. 

They are not subject to provisions of FLSA.

B. 

The minimum wage is $7.25 per hour.

C. 

They may not work more than 45 hours per week.

D. 

The minimum annual salary as of December 2016 is $47,476

Sahar earns a salary of $31,500 per year as a nonexempt employee with a 35-hour standard workweek. What is her hourly rate? (Round to the nearest cent)

A. 

$15.82 per hour

B. 

$16.31 per hour

C. 

$16.89 per hour

D. 

$17.31 per hour

Humberto is a salaried, nonexempt worker who earns $43,950 per year and has a standard 45-hour workweek. What is his hourly rate? (Round to the nearest cent)

A. 

$21.04 per hour

B. 

$18.78 per hour

C. 

$19.98 per hour

D. 

$20.23 per hour

Tony is a salaried, nonexempt employee who earns $37,400 for a standard 40-hour workweek. During a biweekly pay period, he worked 3.5 hours overtime. What is his overtime-hourly rate? (Round to the nearest cent)

A. 

$17.98 per hour

B. 

$24.49 per hour

C. 

$26.97 per hour

D. 

$29.23 per hour

Diane is a salaried, nonexempt worker with a standard workweek of 40 hours. During the last weekly pay period, she earned $148.24 in overtime pay for 5 hours overtime. What is her annual salary? (Do not round intermediate calculations. Round final answer to the nearest whole dollar.)

A. 

$42,500

B. 

$41,112

C. 

$44,950

D. 

$48,720

Breon works as a clerk in the human resources department for her company for which she receives an hourly rate of $9.50. Occasionally she fills in for the receptionist at the front desk and receives a $1.50 per hour differential. During a weekly pay period, she worked 35 hours in the human resources department and 5 hours at the front desk. What is Breon’s gross pay for the week?

A. 

$387.50

B. 

$347.50

C. 

$380.00

D. 

$393.00

Al works in the warehouse for his company and receives $12.75/hour. He occasionally works in the Quality Assurance (QA) department as a receiving clerk and earns a 15% differential for hours worked there. During a two-week pay period, he worked 72 hours in the warehouse and 12 hours in the QA department. He worked all overtime hours in the warehouse. Standard workweek has 40 hours. What is his gross pay for the pay period? (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$1,071.00

B. 

$1.096.50

C. 

$1,042.95

D. 

$1,119.45

Taylor is an outside salesperson for a firm in Idaho. She earns a 10% commission on all sales she makes. During a one-week pay period, she made $2,750 in sales. What is her gross pay? How much does her employer need to contribute toward her pay to meet FLSA standards?

A. 

$275; $0

B. 

$250; $205

C. 

$455; $0

D. 

$275; $180

Lynda works as a sales representative for her company. Her job requires her to travel to customer sites to meet with her customers. Which of the following pay bases would be the most appropriate for her?

A. 

Hourly

B. 

Salary

C. 

Commission

D. 

Piece-rate

Bill is an exempt employee whose annual pay is $53,600 for 37.5 hours per week. During a two-week period, company employees were given a two-day holiday. What is Bill’s regular pay and holiday pay for the period? (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$1,649.23; $412.31

B. 

$1,785.67; $602.38

C. 

$1,630.77; $615.48

D. 

$1,529.74; $603.92

Phillippe is an inside salesperson who earns a base annual salary of $24,000 plus a 5% commission on total sales that he makes during the pay period. During a semimonthly period, he made $27,500 in sales. What is Phillippe’s gross pay for the period? (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$2,298.07

B. 

$2,390.38

C. 

$2,375.00

D. 

$2,422.50

Clark is a piece rate worker who earns $8.25 per completed unit. During a 40-hour workweek, Clark completed 57 units. What is Clark’s hourly rate?

A. 

$15.21 per hour

B. 

$11.76 per hour

C. 

$13.98 per hour

D. 

$12.22 per hour

Quinn works the following hours during a one-week period:  

  Day

hours

minutes

  Monday

8

34

  Tuesday

7

56

  Wednesday

7

58

  Thursday

8

42

  Friday

8

2

Under the hundredth-hour method, how many hours has he worked?

A. 

41.25 hours

B. 

41.85 hours

C. 

41.53 hours

D. 

41.20 hours

Brandie is an hourly worker whose employer uses the quarter-hour method. During a one-week period, she worked the following hours:  

  Day

In

Out

In

Out

  Monday

8:03

12:00

1:03

5:04

  Tuesday

7:57

11:45

12:42

4:56

  Wednesday

8:08

12:15

1:20

5:03

  Thursday

8:02

12:28

1:25

4:58

  Friday

7:52

12:05

12:58

5:12

Using the quarter-hour method, how many hours did she work that week?

A. 

39.50 hours

B. 

39.75 hours

C. 

40.00 hours

D. 

40.25 hours

Brandie is an hourly worker whose employer uses the hundredth-hour method. During a one-week period, she worked the following hours:

  Day

In

Out

In

Out

  Monday

8:03

12:00

1:03

5:04

  Tuesday

7:57

11:45

12:42

4:56

  Wednesday

8:08

12:15

1:20

5:03

  Thursday

8:02

12:28

1:25

4:58

  Friday

7:52

12:05

12:58

5:12

Using the hundredth-hour method, how many hours did she work that week? (Do not round interim calculations. Round final answer to two decimal places.)

A. 

40.17 hours

B. 

40.21 hours

C. 

40.27 hours

D. 

41.26 hours

Brendan is an hourly worker. During a week’s pay period, he worked the following hours and minutes:

  Day

hours

minutes

  Monday

8

45

  Tuesday

7

52

  Wednesday

8

0

  Thursday

9

36

  Friday

8

24

Using the quarter-hour method, how many total hours did Brendan work that week?

A. 

41.75 hours

B. 

42.50 hours

C. 

43.25 hours

D. 

42.25 hours

Brendan is an hourly worker and earns $15.25/hour. During a week’s pay period, he worked the following hours and minutes:

  Day

hours

minutes

  Monday

8

45

  Tuesday

7

52

  Wednesday

8

0

  Thursday

9

36

  Friday

8

24

Using the hundredth-hour method, what is Brendan’s gross pay for the week? The employer pays overtime for all time worked in excess of 40 hours per week. (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$670.00

B. 

$649.90

C. 

$669.86

D. 

$650.00

Betsy is a salaried nonexempt worker who earns $39,500 per year for a 40-hour workweek. During a weekly pay period, she worked the following hours:

  Day

hours

minutes

  Monday

8

22

  Tuesday

8

45

  Wednesday

9

43

  Thursday

7

33

  Friday

8

8

Her employer uses a hundredth-hour method to computer overtime pay. The employer pays overtime for all time worked in excess of 40 hours per week. What is Betsy’s gross pay for the week? (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$819.44

B. 

$759.62

C. 

$799.52

D. 

$831.30

Thaddeus is a salaried exempt worker who earns $57,500 per year for a 45-hour workweek. During a biweekly pay period, he worked 105 hours. What is his gross pay?

A. 

$2,211.54

B. 

$2,764.42

C. 

$2,395.83

D. 

$2,579.85

Maryann is a salaried exempt worker who earns $45,000 per year for a 35-hour workweek. During a biweekly pay period, she worked 65 hours. What is her gross pay?

A. 

$1,607.45

B. 

$1,730.77

C. 

$1,916.21

D. 

$1,823.45

Alan is an hourly worker who earns $10.50 per hour and is paid overtime for any time over 40 hours per week. During a weekly period, he worked the following hours:

  Day

In

Out

In

Out

  Monday

7:53

12:04

13:15

17:25

  Tuesday

7:42

11:30

12:35

16:45

  Wednesday

7:48

12:35

13:28

17:25

  Thursday

8:08

12:22

13:45

17:37

  Friday

7:35

12:13

13:15

16:42

What is his gross pay for the week using both quarter-hour and hundredth hour methods? (Do not round interim calculations. Round final answer to two decimal places.)

A. 

$420.00; $439.69

B. 

$439.69; $439.60

C. 

$420.00; $429.67

D. 

$420.00; $434.69

Libby is an hourly employee who earns $14.32/hour. She is paid overtime only for hours worked past 40 in one week. During a weekly pay period, she worked the following hours:

  Day

hours

minutes

  Monday

8

47

  Tuesday

8

22

  Wednesday

6

25

  Thursday

9

6

  Friday

7

58

What is the difference between her pay using the quarter-hour and the hundredth-hour methods? Which method pays Libby the greater amount? (Do not round interim calculations. Round final answer to two decimal places.)

A. 

$1.07; Quarter-hour

B. 

$1.07; Hundredth-hour

C. 

$2.86; Quarter-hour

D. 

$2.86; Hundredth-hour

The purpose of using combination pay methods is to:

A. 

B. 

C. 

D. 

Martha is a regional supervisor who earns a base salary of $35,000 per year plus a 1% commission on all service contracts that she sells to existing customers. The company pays salaries on a semimonthly basis and contract commissions on a quarterly basis. As of September 30, Martha had made $35,950 in contract sales for the third quarter. What will be her gross pay on her next pay date? (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$1,458.33

B. 

$1,817.83

C. 

$2,053.13

D. 

$1,705.65

Grainne is an inside salesperson who earns an annual salary of $32,800 (paid biweekly) plus a commission on quarterly sales that is paid on the first pay date on the next quarter. She receives a 1% commission for quarterly sales totaling $0 to $25,000, a 2% commission for quarterly sales totaling between $25,001 and $50,000, and a 3% commission for quarterly sales totaling over $50,001. During the second quarter, Grainne’s quarterly sales totaled $46,750. What is her gross pay for the first pay period in July? (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$1,729.04

B. 

$2,301.67

C. 

$2,196.54

D. 

$2,664.04

Andre works for a bakery as a cake decorator and receives a base annual salary of $30,000 (paid weekly) as well as piece-rate pay of 25% of the retail price for any wedding cake that he decorates. His piece-rate earnings are totaled on a monthly basis and are paid on the first pay date of the following month. During the month of June, he decorated eight wedding cakes with a total retail value of $2,650. What is Andre’s gross pay for the first week in July? (Do not round intermediate calculations. Round final answer to 2 decimal places.)

A. 

$1,427.53

B. 

$1,485.96

C. 

$1,239.42

D. 

$1,526.78

Ronda is a college professor who earns an annual salary of $55,000. She performs an additional function as a tutor in the student center, for which she receives $21.83 per hour. During a biweekly pay period, Ronda worked 7.5 hours in the student center. What is her gross pay for the period? (Do not round intermediate calculations. Round final answer to 2 decimal places.)

A. 

$2,115.38

B. 

$2,291.67

C. 

$2,455.39

D. 

$2,279.11

Bruce is a salaried nonexempt employee who earns $42,500 annually, paid semimonthly, plus a 0.25% commission on all regional sales, paid monthly on the first pay date of the following month. During the month of May, the regional sales were $103,500. What was her gross pay for the first half of June? (Do not round intermediate calculations. Round final answer to 2 decimal places.)

A. 

$2,029.58

B. 

$1,770.83

C. 

$1,634.62

D. 

$1,893.37

Lawrin is a real-estate salesperson whose compensation is commission-only. She earns a 3% commission on the sale price of each house that she sells and receives 1.5% commissions at the end of each month (the broker retains the rest per the employment agreement). During the month of July, Lawrin sold two houses totaling $385,420. What is her gross pay for the month of July?

A. 

$5,620.00

B. 

$5,781.30

C. 

$11,562.00

D. 

$8,623.50

Alix is a salesperson who receives an annual salary of $18,000 paid semimonthly plus commissions of 5% of the retail price of each unit he sells which is paid on the final pay date of the month. During his first month of employment, he sold four units for a total of $1,000 and requested a 5% draw against his $15,000 monthly minimum sales, in accordance with his employment agreement. How much should Alix receive in his gross pay for the end of his first month?

A. 

$800.00

B. 

$1,250.00

C. 

$1,550.00

D. 

$1,750.00

During his first month of employment, Alix took a draw of 5% against his minimum sales amount of $15,000 in monthly sales that must be deducted from his pay during the first month that he reaches his minimum sales amount. He receives $18,000 annually in base salary plus a 5% commission on his sales. He receives his base salary on a semimonthly basis and receives his commissions on the final pay date of each month. During his second month of employment, Alix sold $24,000 of equipment. What is Alix’s gross pay for the end of the second month of employment?

A. 

$1,950.00

B. 

$1,500,00

C. 

$1,350.00

D. 

$1,200,00

Lloyd is the CFO for a firm that uses ISOs as part of its executive compensation plan. He receives $150,000 annually, paid semimonthly, in base salary plus 25 shares of the firm’s stock per month. The stock is omitted from gross pay calculations and is valued at $52.50 per share and he may exercise his option within five years at $0.10 per share. What is Lloyd’s gross pay for mid-October?

A. 

$7,250

B. 

$6,250

C. 

$7,560

D. 

$8,250

Aimee is a salaried nonexempt employee who earns an annual salary of $52,500 for a 38-hour workweek, paid biweekly. The employer pays overtime for any hours worked in excess of 38 per week. During a pay period, she worked 86 hours. She has requested that she take compensatory time in lieu of paid overtime. How much compensatory time should she receive, assuming that her firm approves the compensatory time?

A. 

10 hours

B. 

12.5 hours

C. 

15 hours

D. 

20 hours

Naveen is a salaried nonexempt employee who earns annually $39,500 for a 40-hour workweek that is paid semimonthly. He is occasionally on-call for his employer. During the on-call time, Naveen is required to be available for phone calls and must have internet access, but is otherwise able to pursue his own interests. Company policy allows for four hours of regular pay for each day that the employee is on-call. How much should Naveen’s gross pay be for a pay period in which he is on-call for three days? (Do not round interim calculations. Round final answer to two decimal places.)

A. 

$1,873.72

B. 

$1,721.79

C. 

$1,645,83

D. 

$1,747.12

Indra is an employee who is required to be on-call at her employer’s site once per month for eight hours. She earns a salary of $58,750 per year for a 45-hour workweek and is paid biweekly. What is Indra’s gross pay for a pay period that include on-call time? (Do not round interim calculations. Round final answer to two decimal places.)

A. 

$2,447.92

B. 

$2,259.62

C. 

$2,460.47

D. 

$2,648.77

Nicholas is the driver for a company executive. He is paid $13.50 per hour for his services and overtime only for hours worked in excess of 40 hours per week. His actual driving time varies, depending on the needs of the executive. Which of the following is true about Nicholas’s compensation?

A. 

B. 

C. 

D. 

Tetsuko is a surgical resident at a busy metropolitan hospital. She regularly works 24-48 hour shifts as a part of her duties. What must the employer do, according to the FLSA (Select all that apply)?

A. 

Give Tetsuko appropriate meal breaks

B. 

Give Tetsuko time to sleep and deduct those hours from her pay

C. 

Give Tetsuko a minimum of 5 hours sleep time per 24 hours of the shift

D. 

Give Tetsuko additional time off after a long shift

Arnelle is in her third month of work for her employer. She is 18 years of age. Her working hours, computed on a quarter-hour basis, were as follows for the current weekly pay period:

  Day

hours

minutes

  Monday

8

15

  Tuesday

7

45

  Wednesday

7

30

  Thursday

8

15

  Friday

8

15

Arnelle receives the minimum wage, according to the 1996 FLSA Amendment. What is her gross pay for the week using actual hours?

A. 

$290.00

B. 

$246.50

C. 

$145.00

D. 

$170.00

Brittany is a full-time college student and is 21 years of age. Her employer has the option to pay her less than the Federal minimum wage. What is the minimum hourly rate that Brittany may receive?

A. 

$7.25 per hour

B. 

$4.25 per hour

C. 

$6.16 per hour

D. 

$5.80 per hour

Which of the following is not a class of worker that may receive an hourly rate below the Federal minimum wage?

A. 

Disabled employees in occupations unrelated to their disability

B. 

Full-time college students in agricultural occupations

C. 

A 16 year-old employee in the first 90 days of work

D. 

A student learner currently enrolled in a vocational education program

Dorothy is a full-time student in a medical assisting program at a vocational education program. She works part-time for a nursing home as a nurse’s assistant and worked 17.5 hours during the last weekly pay period. What should Dorothy’s gross pay be for that week? (Do not round interim calculations. Round final answer to two decimal places.)

A. 

$290.00

B. 

$170.00

C. 

$147.25

D. 

$95.16

Susan travels among client sites as a routine part of her employment. Travel to her first customer site and from the last customer site to her home are not compensated. Under which of the following circumstances will she be compensated for her travel (Select all that apply)?

A. 

Travel from the client site to a personal dinner engagement at the end of the workday

B. 

Travel between client sites and the firm’s office

C. 

Travel from her home to the client site at the beginning of the workday

D. 

Travel to alternate sites for the firm’s meetings with multiple clients

_________________ are always exempt from FLSA provisions.

A. 

Non-profit firms

B. 

Hospitals

C. 

Government agencies

D. 

Nannies with annual earnings of $1,500

The difference between the tipped employee minimum wage and the federal minimum wage is called the ___________________________________.

A. 

Tip allowance.

B. 

Wage credit.

C. 

Tip credit.

D. 

Wage allowance.

A nonexempt, salaried worker who received $46,500 in annual compensation for a 40-hour standard workweek has an hourly rate of _________. (Round to nearest cent)

A. 

$23.26.

B. 

$22.86.

C. 

$22.64.

D. 

$22.36.

Joanna, a salaried nonexempt employee, earns a salary of $38,950 for a standard 37.5-hour workweek and is paid weekly. During a weekly period, she worked 6 hours of overtime. Her gross pay for the week would be_______________. (Do not round interim calculations. Round final answer to two decimal places.)

A. 

$928.81.

B. 

$936.52.

C. 

$868.88.

D. 

$894.22.

Mac is a cook at a local restaurant and earns $9.15 per hour. He occasionally serves as the crew chief, for which he receives an additional $2.50 per hour. During a biweekly pay period, he had the following time data:

Cook: 75 hours (including 8 hours overtime)

Crew chief: 13 hours

His gross pay for the pay period would be_______________. (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$902.58.

B. 

$878.31.

C. 

$874.30.

D. 

$841.80.

Huynh is a piece rate worker who creates custom molds for a plastics manufacturer. During a 40-hour workweek, he created 22 molds at a piece rate of $38.25 per mold. His hourly rate during the workweek is ____________________. (Do not round interim calculations. Round final answer to two decimal places.)

A. 

$18.38.

B. 

$21.04.

C. 

$19.46.

D. 

$20.96.

Maya is compensated using a salary-plus-commission basis for her work. Her annual base salary is $32,000. During a semimonthly pay period she made $18,500 in sales, for which she receives a 2% commission. Her gross pay for the semimonthly period is_________________. (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$1,333.33.

B. 

$1,523.55.

C. 

$1,693.54.

D. 

$1,703.33.

Adrienne worked 88 hours during a biweekly period. Her standard workweek comprises 38.5 hours and company policy states that employees may receive overtime or compensatory time for hours worked in excess of 38.5. She has requested compensatory time in lieu of overtime, in keeping with company policy. She must receive _____________ hours of compensatory time.

A. 

11.5

B. 

16.5

C. 

15.5

D. 

13.5

Robin, 18 years of age, is an hourly worker in her college’s bookstore in Washington state. She works 37 hours during a two-week pay period in her second month of work for the bookstore. The minimum gross pay that she may receive for that two-week period is ___________________. (Round to the nearest cent)

A. 

$157.25.

B. 

$228.01.

C. 

$268.25.

D. 

$344.84.

Weishan is a full-time student at a vocational school where he is learning automotive repair. He works for a local car repair garage and works 21 hours per week. The minimum wage is the same as the federal minimum wage. His gross pay per week is _____________________. (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$89.25.

B. 

$114.19.

C. 

$129.41.

D. 

$152.25.

Which of the following best describes the purpose of the payroll register?

A. 

It is a list of all persons and companies that the company pays money during a period.

B. 

It is a report that becomes published with other financial reports.

C. 

It is a worksheet that accountants use to ensure payroll accuracy.

D. 

It is an individual register maintained for each employee, listing of all the payroll information.

Which of the following items would not appear as a column on a payroll register?

A. 

Hiring date

B. 

Marital status

C. 

Number of withholding allowances

D. 

Hours worked

Computing the sum of rows and columns is known by the term

A. 

Compute.

B. 

Total.

C. 

Prove.

D. 

Rule.

What does it mean to prove the payroll register?

A. 

Gaining approval to disburse payroll amounts.

B. 

Verifying the validity of employees’ time sheets.

C. 

Ensuring that the sum of the column totals equals the sum of the row totals.

D. 

Computing the column and row totals.

According to the FLSA, when must overtime be paid to nonexempt employees?

A. 

Any time the employee works more than 8 hours per day.

B. 

Any time the employee works more than 6-days during a one-week period.

C. 

Any hours worked in excess of 40 in a 7-day, 168-hour period.

D. 

Any hours deemed overtime by the employee’s supervisor.

Adam is a nonexempt employee who is single with one withholding allowance and earns $15

per hour and has a standard 40-hour workweek. During a weekly pay period, he worked 46

hours. What is Adam’s gross pay for the period? (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$600.00.

B. 

$690.00.

C. 

$735.00.

D. 

$1,035.00.

Daanyal is a salaried nonexempt employee who is married with two withholding allowances

and earns $34,000 per year. During a biweekly pay period, he worked 88 hours. His standard workweek is 40 hours. What is Daanyal’s gross pay for the period? (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$1,307.69.

B. 

$1,438.80.

C. 

$1,489.26.

D. 

$1,503.85.

Cyrus is a tipped employee in Illinois. He is single with one withholding allowance and the minimum cash wage in Illinois is $4.95 per hour for a 40-hour workweek. The tip credit in

Illinois is $3.30 per hour (i.e., the minimum wage in Illinois is $8.25 per hour), and tips are

included in overtime calculations. During a one-week period, Cyrus worked 52 hours and

earned $180 in tips. What is his gross pay? (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$351.60.

B. 

$467.10.

C. 

$426.80.

D. 

$510.00.

Maribeth is a wedding cake designer who earns $120 per completed cake. She is married with

zero withholding allowances and earns minimum wage (i.e., $7.25 per hour) for non-productive time during a 40-hour workweek. During a weekly pay period, she worked 45 hours, 3 of which were non-productive time, and completed 9 cakes. What is Maribeth’s gross pay? (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$1,101.75.

B. 

$1,161.75.

C. 

$1,176.25.

D. 

$1,569.38.

Bruce is a nonexempt employee at Grissom Industries, where he works in both the manufacturing and design departments. He is married with three withholding allowances and is paid biweekly.

He earns $25 per hour in the manufacturing department and $31.50 per hour in the design department. During the most recent biweekly pay period, he worked a total of 92 hours, 60 of which were in the manufacturing department. All overtime was in the manufacturing department. What is his gross pay? (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$2,580.00.

B. 

$2,638.50.

C. 

$2,697.00.

D. 

$3,147.00.

Gross pay is the amount of employee compensation prior to deducting any amounts for taxes or other withholdings.

Salaried employees may be classified as nonexempt.

A firm is always exempt from FLSA provisions if it has fewer than 5 employees.

The tipped minimum wage is $2.13 per hour for all states.

Federal policy explains clear differences between exempt and nonexempt employees.

To compute the hourly rate for an employee with a 40-hour standard workweek, you would divide the annual salary by 2,080.

Piece-rate pay is used for employees who participate materially in the sale of manufacturing components.

The hundredth-hour system promotes more accuracy in employee time collection than the quarter-hour system.

9.

The payroll register is a confidential company document.

TRUE

AACSB: Communication
AICPA: BB Industry
AICPA: FN Reporting
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 03-05 Create a Payroll Register
Topic: Create a Payroll Register

Compensatory time is only federally mandated for public salaried exempt employees.

Nonexempt employees are usually workers who:

A. 

Routinely supervise other employees.

B. 

Are exempt from certain company rules.

C. 

Occupy executive positions in the company.

D. 

Perform operative level tasks.

Which of the following automatically exempts an employer from FLSA provisions (Select all that apply)?

A. 

The firm has annual volume of less than $500,000.

B. 

The firm is a school for physically handicapped children.

C. 

The firm is a governmental agency.

D. 

The firm conducts no interstate commerce.

The difference between the federal minimum wage and the tipped wage involves:

A. 

The type of work the employee performs.

B. 

An employee’s qualifications for the job.

C. 

The size of the town in which the employers is located.

D. 

Supervisory reviews about the employee’s performance.

Which of the following is always true about tipped employees?

A. 

The minimum wage for tipped employees is consistent among all states.

B. 

They have the opportunity to earn tips from patrons as a regular part of their job.

C. 

They only earn occasional tips from other employees.

D. 

They must earn more than 50% of their income from tips.

Vincent is a tipped employee who earns a wage of $2.13 per hour in a tip-credit state and works a standard 40-hour workweek. Last week, he earned $60 in tips. Which of the following is true?

A. 

B. 

Vincent’s employer may not report his tips for income tax purposes.

C. 

Vincent’s employer must pay him the tip credit because his wages and tips for the week were less than the federal minimum wage.

D. 

Vincent must file a request with his employer to have the tip credit applied to his wages for the week.

Cole is a minimum wage employee in Santa Fe, NM, where the minimum wage is $10.91 per hour. His employer claims that since the federal minimum wage is $7.25 per hour, Cole should only receive the federal amount. What is the correct answer in this situation?

A. 

B. 

C. 

The employer is correct that the federal minimum wage overrules the state wage.

D. 

The employer must pay the state-designated minimum wage for the area.

Paloma is a 16-year old who babysits for a local family on an occasional basis. During a calendar year, she earned $1,250 in babysitting wages. What is true about Paloma’s wages?

A. 

B. 

C. 

D. 

Since the family conducts no interstate commerce, FLSA provisions cannot apply.

As of December 2016, the minimum wage for salaried employees is:

A. 

$893/week.

B. 

$903/week.

C. 

$913/week.

D. 

$923/week.

Which of the following is true about salaried employees (Select all that apply)?

A. 

They are not subject to provisions of FLSA.

B. 

The minimum wage is $7.25 per hour.

C. 

They may not work more than 45 hours per week.

D. 

The minimum annual salary as of December 2016 is $47,476.

Sahar earns a salary of $31,500 per year as a nonexempt employee with a 35-hour standard workweek. What is her hourly rate? (Round to the nearest cent)

A. 

$15.82 per hour

B. 

$16.31 per hour

C. 

$16.89 per hour

D. 

$17.31 per hour

Annual salary

hours/week

weeks/year

Gross pay per period

$ 31,500.00

35

52

$ 17.31

Humberto is a salaried, nonexempt worker who earns $43,950 per year and has a standard 45-hour workweek. What is his hourly rate? (Round to the nearest cent)

A. 

$21.04 per hour

B. 

$18.78 per hour

C. 

$19.98 per hour

D. 

$20.23 per hour

Annual salary

hours/week

weeks/year

Gross pay per period

$ 43,950.00

45

52

$ 18.78

Tony is a salaried, nonexempt employee who earns $37,400 for a standard 40-hour workweek. During a biweekly pay period, he worked 3.5 hours overtime. What is his overtime-hourly rate? (Round to the nearest cent)

A. 

$17.98 per hour

B. 

$24.49 per hour

C. 

$26.97 per hour

D. 

$29.23 per hour

Annual salary

hours/week

weeks/year

Gross pay per period

Overtime rate

$ 37,400.00

40

52

$ 17.98

$ 26.97

Diane is a salaried, nonexempt worker with a standard workweek of 40 hours. During the last weekly pay period, she earned $148.24 in overtime pay for 5 hours overtime. What is her annual salary? (Do not round intermediate calculations. Round final answer to the nearest whole dollar.)

A. 

$42,500

B. 

$41,112

C. 

$44,950

D. 

$48,720

Overtime Pay

OT hours

Overtime Premium

Hourly wage

Hours/week

Weeks/year

Annual Salary

$ 148.24

5

1.5

$ 19.77

40

52

$41,112

Breon works as a clerk in the human resources department for her company for which she receives an hourly rate of $9.50. Occasionally she fills in for the receptionist at the front desk and receives a $1.50 per hour differential. During a weekly pay period, she worked 35 hours in the human resources department and 5 hours at the front desk. What is Breon’s gross pay for the week?

A. 

$387.50

B. 

$347.50

C. 

$380.00

D. 

$393.00

Department

rate

# hours

gross pay

HR

$ 9.50

35

$ 332.50

Front Desk

$ 11.00

5

$ 55.00

Total

$ 387.50

Al works in the warehouse for his company and receives $12.75/hour. He occasionally works in the Quality Assurance (QA) department as a receiving clerk and earns a 15% differential for hours worked there. During a two-week pay period, he worked 72 hours in the warehouse and 12 hours in the QA department. He worked all overtime hours in the warehouse. Standard workweek has 40 hours. What is his gross pay for the pay period? (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$1,071.00

B. 

$1.096.50

C. 

$1,042.95

D. 

$1,119.45

Department

rate

# hours

gross pay

Warehouse

$ 12.75

68

$ 867.00

Warehouse--OT

$ 19.13

4

$ 76.50

QA

$ 14.66

12

$ 175.95

$ 1,119.45

Taylor is an outside salesperson for a firm in Idaho. She earns a 10% commission on all sales she makes. During a one-week pay period, she made $2,750 in sales. What is her gross pay? How much does her employer need to contribute toward her pay to meet FLSA standards?

A. 

$275; $0

B. 

$250; $205

C. 

$455; $0

D. 

$275; $180

Lynda works as a sales representative for her company. Her job requires her to travel to customer sites to meet with her customers. Which of the following pay bases would be the most appropriate for her?

A. 

Hourly

B. 

Salary

C. 

Commission

D. 

Piece-rate

Bill is an exempt employee whose annual pay is $53,600 for 37.5 hours per week. During a two-week period, company employees were given a two-day holiday. What is Bill’s regular pay and holiday pay for the period? (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$1,649.23; $412.31

B. 

$1,785.67; $602.38

C. 

$1,630.77; $615.48

D. 

$1,529.74; $603.92

Annual salary

hours/week

weeks/year

Hourly Rate

$ 53,600

37.5

52

$ 27.49

Pay type

rate

# hours

gross pay

Regular

$ 27.49

60

$ 1,649.23

holiday

$ 27.49

15

$ 412.31

Phillippe is an inside salesperson who earns a base annual salary of $24,000 plus a 5% commission on total sales that he makes during the pay period. During a semimonthly period, he made $27,500 in sales. What is Phillippe’s gross pay for the period? (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$2,298.07

B. 

$2,390.38

C. 

$2,375.00

D. 

$2,422.50

Hourly Rate or Period wage

Commissions

Gross Earning

$ 1,000.00

$ 1,375.00

$ 2,375.00

Clark is a piece rate worker who earns $8.25 per completed unit. During a 40-hour workweek, Clark completed 57 units. What is Clark’s hourly rate?

A. 

$15.21 per hour

B. 

$11.76 per hour

C. 

$13.98 per hour

D. 

$12.22 per hour

Pay/unit

# units completed

gross pay

# hours

Hourly rate

$ 8.25

57

$ 470.25

40

$ 11.76

Quinn works the following hours during a one-week period:  

  Day

hours

minutes

  Monday

8

34

  Tuesday

7

56

  Wednesday

7

58

  Thursday

8

42

  Friday

8

2

Under the hundredth-hour method, how many hours has he worked?

A. 

41.25 hours

B. 

41.85 hours

C. 

41.53 hours

D. 

41.20 hours

hours

minutes

100th hour

Total

Monday

8

34

0.57

8.57

Tuesday

7

56

0.93

7.93

Wednesday

7

58

0.97

7.97

Thursday

8

42

0.70

8.70

Friday

8

2

0.03

8.03

Total hours

41.20

Brandie is an hourly worker whose employer uses the quarter-hour method. During a one-week period, she worked the following hours:  

  Day

In

Out

In

Out

  Monday

8:03

12:00

1:03

5:04

  Tuesday

7:57

11:45

12:42

4:56

  Wednesday

8:08

12:15

1:20

5:03

  Thursday

8:02

12:28

1:25

4:58

  Friday

7:52

12:05

12:58

5:12

Using the quarter-hour method, how many hours did she work that week?

A. 

39.50 hours

B. 

39.75 hours

C.

40.00 hours

D. 

40.25 hours

AM

PM

Total

Monday

4

4

8.00

Tuesday

3.75

4.25

8.00

Wednesday

4

3.75

7.75

Thursday

4.5

3.5

8.00

Friday

4.25

4.25

8.50

Total hours

40.25

Brandie is an hourly worker whose employer uses the hundredth-hour method. During a one-week period, she worked the following hours:

  Day

In

Out

In

Out

  Monday

8:03

12:00

1:03

5:04

  Tuesday

7:57

11:45

12:42

4:56

  Wednesday

8:08

12:15

1:20

5:03

  Thursday

8:02

12:28

1:25

4:58

  Friday

7:52

12:05

12:58

5:12

Using the hundredth-hour method, how many hours did she work that week? (Do not round interim calculations.

Round final answer to two decimal places.)

A. 

40.17 hours

B. 

40.21 hours

C. 

40.27 hours

D. 

41.26 hours

  Day

In

Out

# hrs

In

Out

# hrs

  Monday

8:03

12:00

3.95

1:03

5:04

4.02

  Tuesday

7:57

11:45

3.80

12:42

4:56

4.23

  Wednesday

8:08

12:15

4.12

1:20

5:03

3.72

  Thursday

8:02

12:28

4.43

1:25

4:58

3.55

  Friday

7:52

12:05

4.22

12:58

5:12

4.23

Total

40.27

Brendan is an hourly worker. During a week’s pay period, he worked the following hours and minutes:

  Day

hours

minutes

  Monday

8

45

  Tuesday

7

52

  Wednesday

8

0

  Thursday

9

36

  Friday

8

24

Using the quarter-hour method, how many total hours did Brendan work that week?

A. 

41.75 hours

B. 

42.50 hours

C. 

43.25 hours

D. 

42.25 hours

  Day

hours

minutes

total time

  Monday

8

45

8.75

  Tuesday

7

52

7.75

  Wednesday

8

0

8

  Thursday

9

36

9.5

  Friday

8

24

8.5

Total

42.5

Brendan is an hourly worker and earns $15.25/hour. During a week’s pay period, he worked the following hours and minutes:

  Day

hours

minutes

  Monday

8

45

  Tuesday

7

52

  Wednesday

8

0

  Thursday

9

36

  Friday

8

24

Using the hundredth-hour method, what is Brendan’s gross pay for the week? The employer pays overtime for all time worked in excess of 40 hours per week. (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$670.00

B. 

$649.90

C. 

$669.86

D. 

$650.00

Pay type

rate

# hours

gross pay

Regular

$ 15.25

40

$ 610.00

OT

$ 22.88

2.6166667

$ 59.86

$ 669.86

  Day

hours

minutes

total time

  Monday

8

45

8.75

  Tuesday

7

52

7.8666667

  Wednesday

8

0

8

  Thursday

9

36

9.6

  Friday

8

24

8.4

Total

42.6166667

Betsy is a salaried nonexempt worker who earns $39,500 per year for a 40-hour workweek. During a weekly pay period, she worked the following hours:

  Day

hours

minutes

  Monday

8

22

  Tuesday

8

45

  Wednesday

9

43

  Thursday

7

33

  Friday

8

8

Her employer uses a hundredth-hour method to computer overtime pay. The employer pays overtime for all time worked in excess of 40 hours per week. What is Betsy’s gross pay for the week? (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$819.44

B. 

$759.62

C. 

$799.52

D. 

$831.30

Annual salary

hours/week

weeks/year

Hourly Rate

Overtime rate

$ 39,500

40

52

$ 18.99

$ 28.49

  Day

hours

minutes

total time

  Monday

8

22

8.3666667

  Tuesday

8

45

8.75

  Wednesday

9

43

9.7166667

  Thursday

7

33

7.55

  Friday

8

8

8.1333333

Total

42.5166667

Pay type

rate

# hours

gross pay

Regular

$ 18.99

40

$ 759.62

OT

$ 28.49

2.5166667

$ 71.69

$ 831.30

Thaddeus is a salaried exempt worker who earns $57,500 per year for a 45-hour workweek. During a biweekly pay period, he worked 105 hours. What is his gross pay?

A. 

$2,211.54

B. 

$2,764.42

C. 

$2,395.83

D. 

$2,579.85

Name

Hourly Rate or Period Wage

Gross Earning

Thaddeus

$ 2,211.54

$ 2,211.54

Maryann is a salaried exempt worker who earns $45,000 per year for a 35-hour workweek. During a biweekly pay period, she worked 65 hours. What is her gross pay?

A. 

$1,607.45

B. 

$1,730.77

C. 

$1,916.21

D. 

$1,823.45

Name

Hourly Rate or Period Wage

Gross Earning

Maryann

$ 1,730.77

$ 1,730.77

Alan is an hourly worker who earns $10.50 per hour and is paid overtime for any time over 40 hours per week. During a weekly period, he worked the following hours:

  Day

In

Out

In

Out

  Monday

7:53

12:04

13:15

17:25

  Tuesday

7:42

11:30

12:35

16:45

  Wednesday

7:48

12:35

13:28

17:25

  Thursday

8:08

12:22

13:45

17:37

  Friday

7:35

12:13

13:15

16:42

What is his gross pay for the week using both quarter-hour and hundredth hour methods? (Do not round interim calculations. Round final answer to two decimal places.)

A. 

$420.00; $439.69

B. 

$435.75; 439.43

C. 

$420.00; $429.67

D. 

$420.00; $434.69

  Day

In

Out

# hrs

In

Out

# hrs

  Monday

7:53

12:04

4.00

13:15

17:25

4.25

  Tuesday

7:42

11:30

3.75

12:35

16:45

4.25

  Wednesday

7:48

12:35

4.75

13:28

17:25

4.00

  Thursday

8:08

12:22

4.00

13:45

17:37

3.75

  Friday

7:35

12:13

4.75

13:15

16:42

3.50

Total

41.00

Pay type

rate

# hours

gross pay

Regular

$ 10.50

40

$ 420.00

OT

$ 15.75

1.00

$ 15.75

$ 435.75

  Day

In

Out

# hrs

In

Out

# hrs

  Monday

7:53

12:04

4.18

13:15

17:25

4.17

  Tuesday

7:42

11:30

3.80

12:35

16:45

4.17

  Wednesday

7:48

12:35

4.78

13:28

17:25

3.95

  Thursday

8:08

12:22

4.23

13:45

17:37

3.87

  Friday

7:35

12:13

4.63

13:15

16:42

3.45

Total

41.23

Pay type

rate

# hours

gross pay

Regular

$ 10.50

40

$ 420.00

OT

$ 15.75

1.23

$ 19.43

$ 439.43

Libby is an hourly employee who earns $14.32/hour. She is paid overtime only for hours worked past 40 in one week. During a weekly pay period, she worked the following hours:

  Day

hours

minutes

  Monday

8

47

  Tuesday

8

22

  Wednesday

6

25

  Thursday

9

6

  Friday

7

58

What is the difference between her pay using the quarter-hour and the hundredth-hour methods? Which method pays Libby the greater amount? (Do not round interim calculations. Round final answer to two decimal places.)

A. 

$1.07; Quarter-hour

B. 

$1.07; Hundredth-hour

C. 

$2.86; Quarter-hour

D. 

$2.86; Hundredth-hour

Quarter hour pay

Hundredth hour pay

Difference

$ 583.54

$ 586.40

$ 2.86

  Day

hours

minutes

total time

  Monday

8

47

8.75

  Tuesday

8

22

8.25

  Wednesday

6

25

6.5

  Thursday

9

6

9

  Friday

7

58

8

Total

40.50

Pay type

rate

# hours

gross pay

Regular

$ 14.32

40

$ 572.80

OT

$ 21.48

0.50

$ 10.74

$ 583.54

  Day

hours

minutes

total time

  Monday

8

47

8.7833333

  Tuesday

8

22

8.3666667

  Wednesday

6

25

6.4166667

  Thursday

9

6

9.1

  Friday

7

58

7.9666667

Total

40.6333333

Pay type

rate

# hours

gross pay

Regular

$ 14.32

40

$ 572.80

OT

$ 21.48

0.63333

$ 13.60

$ 586.40

The purpose of using combination pay methods is to:

A. 

B. 

C. 

D. 

Martha is a regional supervisor who earns a base salary of $35,000 per year plus a 1% commission on all service contracts that she sells to existing customers. The company pays salaries on a semimonthly basis and contract commissions on a quarterly basis. As of September 30, Martha had made $35,950 in contract sales for the third quarter. What will be her gross pay on her next pay date? (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$1,458.33

B. 

$1,817.83

C. 

$2,053.13

D. 

$1,705.65

Name

Hourly Rate or Period wage

Commissions

Gross Earning

Martha

$ 1,458.33

$ 359.50

$ 1,817.83

Grainne is an inside salesperson who earns an annual salary of $32,800 (paid biweekly) plus a commission on quarterly sales that is paid on the first pay date on the next quarter. She receives a 1% commission for quarterly sales totaling $0 to $25,000, a 2% commission for quarterly sales totaling between $25,001 and $50,000, and a 3% commission for quarterly sales totaling over $50,001. During the second quarter, Grainne’s quarterly sales totaled $46,750. What is her gross pay for the first pay period in July? (Do not round interim calculations. Round final answer to 2 decimal places.)

A. 

$1,729.04

B. 

$2,301.67

C. 

$2,196.54

D. 

$2,664.04

Name

Hourly Rate or Period wage

Commissions

Gross Earning

Grainne

$ 1,261.54

$ 935.00

$ 2,196.54

Andre works for a bakery as a cake decorator and receives a base annual salary of $30,000 (paid weekly) as well as piece-rate pay of 25% of the retail price for any wedding cake that he decorates. His piece-rate earnings are totaled on a monthly basis and are paid on the first pay date of the following month. During the month of June, he decorated eight wedding cakes with a total retail value of $2,650. What is Andre’s gross pay for the first week in July? (Do not round intermediate calculations. Round final answer to 2 decimal places.)

A. 

$1,427.53

B. 

$1,485.96

C. 

$1,239.42

D. 

$1,526.78

Name

Hourly Rate or Period wage

Piece-Rate

Gross Earning

Andre

$ 576.92

$ 662.50

$ 1,239.42

Ronda is a college professor who earns an annual salary of $55,000. She performs an additional function as a tutor in the student center, for which she receives $21.83 per hour. During a biweekly pay period, Ronda worked 7.5 hours in the student center. What is her gross pay for the period? (Do not round intermediate calculations. Round final answer to 2 decimal places.)

A. 

$2,115.38

B. 

$2,291.67

C. 

$2,455.39

D. 

$2,279.11

Name

Hourly Rate or Period wage

Tutoring

Gross Earning

Ronda

$ 2,115.38

$ 163.73

$ 2,279.11

Bruce is a salaried nonexempt employee who earns $42,500 annually, paid semimonthly, plus a 0.25% commission on all regional sales, paid monthly on the first pay date of the following month. During the month of May, the regional sales were $103,500. What was her gross pay for the first half of June? (Do not round intermediate calculations. Round final answer to 2 decimal places.)

A. 

$2,029.58

B. 

$1,770.83

C. 

$1,634.62

D.