How do you create a multiplication calculation in one column that is related to a drop down?

I am pretty sure this would be done with an IF statement but I am totally new.
I have a column that is a drop down with Wage or Full Time, 2nd column is gross pay (which is fillable by the user), The 3rd column has fringe. Depending on if they select wage or full time the gross pay would be multiplied by .765 for wage and .36 for full time. I have been searching for a solution but have not been able to find it.
Thanks for your help!

One needs to be careful because if "0" value is used for an optional value in a drop down the result will be "0". So chose the value for missing data carefully. If your calculation should not be run until specific fields are complete then you will need to use custom calculation script and test the field values to see that your calculation requirement is met.

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