Davis and Thompson have earnings of $850 each. The social security tax rate is 6.0%, and the Medicare tax rate is 1.5%. Assuming that the payroll will be paid on December 29, what will be the employer's total FICA tax for this payroll period?

A) $102.00
B) $127.50
C) $96.00
D) $25.50

To find the employer's total FICA tax, we need to calculate the social security tax and the Medicare tax separately for both employees, and then add them up.

For each employee:

Social security tax = earnings x social security tax rate = $850 x 6% = $51
Medicare tax = earnings x Medicare tax rate = $850 x 1.5% = $12.75

For both employees:

Total social security tax = $51 + $51 = $102
Total Medicare tax = $12.75 + $12.75 = $25.50

Employer's total FICA tax = total social security tax + total Medicare tax = $102 + $25.50 = $127.50

Therefore, the best choice is B, $127.50.