A general liability premium is allocated by revenue. If annual premium is $24,000 and a job is 8 percent of annual revenue, what insurance cost is allocated?
Correct Answer
B) $1,920.
The allocation is $24,000 x 8 percent = $1,920.
Why This Is the Correct Answer
The allocation is $24,000 x 8 percent = $1,920.
Why the Other Options Are Wrong
Option A: $2,400.
$2,400. is above the supported result for insurance allocation calculation; it likely pays the wrong premium tier or counts the same hours twice.
Option C: $960.
$960. is below the supported result for insurance allocation calculation; it likely skips a premium-pay or employer-cost component.
Option D: $2,304.
$2,304. is above the supported result for insurance allocation calculation; it likely pays the wrong premium tier or counts the same hours twice.
Memory Technique
Allocating Overhead payroll: time, premium, reimbursement, proof in separate buckets.
Reference Hint
Study anchor (closed-book): memorize Insurance allocation calculation from CSLB 2026 Law Book; CSLB workers' compensation guidance; California. / CSLB Law Book insurance and business finance study concepts; know the rule or calculation trigger without relying on exam-room lookup.
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