16. 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
Answer: B
The total workers' compensation for the year is $275.00.
To calculate the total workers' compensation, the contractor must apply the rates to both office and field employee payrolls. The workers' compensation for office employees is $25,000 at a rate of $0.10 per $100, and for field employees, it's $125,000 at $0.20 per $100, leading to a total of $275.00 for the year.
A) $250.00
This option is incorrect as it underestimates the total workers' compensation. The calculation for office payroll alone yields $25,000 / $100 * $0.10 = $25.00, and the field payroll calculation gives $125,000 / $100 * $0.20 = $250.00, which totals $275.00, not $250.00.
B) $275.00
This option is correct. The worker’s compensation for office employees amounts to $25.00, and for field employees, it amounts to $250.00. Therefore, the combined total compensation is $25.00 + $250.00 = $275.00.
C) $300.00
This option is incorrect as it overestimates the total workers' compensation. The calculations do not support a total of $300.00, since the correct totals for both office and field payrolls add up to $275.00.
D) $450.00
This option is also incorrect. A total of $450.00 does not reflect the correct calculations for either the office or field payrolls. The figures calculated from the payrolls do not yield this total, reaffirming that the correct amount is $275.00.
Conclusion
The correct answer of $275.00 is derived from accurate calculations based on the given rates for both office and field employees' payrolls. Options A, C, and D fail to match the computations required for total workers' compensation, reinforcing that B is the only viable choice.