Final answer:
To find the total amount of withholdings incurred by Luxury Cruise Lines in January, we sum the FICA ($198,900) and employee federal and state income taxes ($552,500) to get a total of $751,400. The additional employer costs are not withholdings and hence are not included.
Step-by-step explanation:
The question seeks to determine the total amount of withholdings incurred by Luxury Cruise Lines in January. Withholding for a company typically includes federal and state taxes taken from employees’ salaries, including both income taxes and contributions for social security and Medicare through FICA (Federal Insurance Contributions Act). It may also include other deductions such as health insurance premiums.
Based on the information provided, the withholdings related to employee salaries at Luxury Cruise Lines include $198,900 for FICA and $552,500 for employee federal and state income taxes. The federal and state unemployment tax of $161,200 and the employer’s portion of health insurance premiums at $78,000 are additional employer costs and not withholdings from employee salaries. Therefore, they are not included in the total withholdings figure. The total amount of withholdings specifically incurred would be the sum of the FICA and the employee federal and state income taxes.
To calculate this, we simply add the two figures:
-
- Employee portion of FICA: $198,900
-
- Employee federal and state income taxes: $552,500
The total withholdings for January = $198,900 (FICA) + $552,500 (federal and state) = $751,400.
Based on the options provided, none matches the correct total of withholdings; therefore, it appears that the list may not contain the correct answer, or there has been an oversight.