A contractor pays a workers' compensation rate of $0.10 per $100 of office employee payroll and $0.20 per $100 of field employee salary. Total office employee payroll for the year is $25,000. Total field employee payroll is $125,000. The total workers' compensation for the year is

Rationale

$275.00 is the total workers' compensation for the year.

To calculate the total workers' compensation, we need to determine the costs for both office and field employees based on their respective payroll rates. The calculation shows that the total compensation amounts to $275.00.

A ($250.00) YOUR ANSWER

This amount incorrectly reflects the office employee payroll only. The workers' compensation for office employees is calculated as $0.10 per $100 of a $25,000 payroll, which totals $25.00. However, this choice does not account for the field employee payroll, leading to an incomplete total.

B ($275.00) CORRECT

This is the correct answer. The compensation for office employees is $25.00, calculated as $0.10 per $100 on a $25,000 payroll. For field employees, it is $250.00, calculated as $0.20 per $100 on a $125,000 payroll. Adding these amounts together gives a total of $275.00.

C ($300.00) YOUR ANSWER

This total mistakenly assumes a higher rate or incorrect payroll figures. The calculation for office employees is accurate at $25.00, but the field employee compensation is overestimated here, as it should only total $250.00, not $275.00, resulting in an overall incorrect total.

D ($450.00) YOUR ANSWER

This choice significantly overstates the total workers' compensation. The calculations for both office and field employee payrolls do not support this value. The office compensation is $25.00, and the field compensation is $250.00, leading to a total of $275.00, not $450.00.

Conclusion

The total workers' compensation is derived from a straightforward calculation based on payroll rates for both office and field employees. The correct total of $275.00 arises from accurate application of the compensation rates to the given payroll figures. Understanding these calculations is crucial for managing budget allocations related to employee compensation.

A contractor pays a workers' compensation rate of $0.10 per $100 of office employee payroll and $0.20 per $100 of field employee salary. Total office employee payroll for the year is $25,000. Total field employee payroll is $125,000. The total workers' compensation for the year is

$275.00 is the total workers' compensation for the year.

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