Answer:
= $37,800
Explanation:
Step 1: Bring out the important figures for the calculation
Coronado Industries taxable payroll = $1,350,000
Federal Unemployment Tax Act (FUTA) rate = 6.2%
State Unemployment Tax Acy (SUTA) rate is 5.4% of the the FUTA's 6.2%
Third very important information: SUTA has been reduced to 2%
Step 2: Apply the information before the reduction
FUTA rate = 6.2% - 5.4% = 0.8%
Meaning FUTA = 0.8% x $1,350,000= $10,800
SUTA = 5.4% x 1,350,000= 72,900
Total = $83,700
Step 3: Calculate the new total FUTA and SUTA based on reduction of SUTA to 2%
First, FUTA remains constant
= 0.8% of $1, 350,000= $10,800
Secondly, SUTA is now 2%
= 2% (0.02) x $1,350,000= $27,000
Total amount of FUTA and SUTA for Coronado Industries
= $10,800 + $27,000
= $37,800
