A contractor has 12 employees with a total weekly payroll of $18,000. Using Louisiana's workers' compensation rate of $3.25 per $100 of payroll for construction, what is the weekly premium?
Correct Answer
B) $585
Weekly premium = ($18,000 ÷ $100) × $3.25 = 180 × $3.25 = $585
Why This Is the Correct Answer
$18,000 ÷ $100 = 180 units of $100. Then 180 × $3.25 = $585. This is the standard per-$100-of-payroll calculation method used for workers' compensation in Louisiana.
Why the Other Options Are Wrong
Option A: $285
$285 results from a calculation error — possibly dividing $18,000 by a wrong factor or applying an incorrect rate (e.g., $3.25 × 87.7 or misreading the payroll).
Option C: $385
$385 results from a partial calculation error, possibly computing 180 × $2.14 or similar, or using a rate close to but not $3.25.
Option D: $485
$485 is between $385 and $585, suggesting an intermediate arithmetic error or use of an incorrect rate such as $2.69 per $100.
Memory Technique
Per $100 = divide payroll by 100 FIRST, then multiply by rate. $18,000 ÷ 100 = 180 → 180 × $3.25 = $585. Think: 'units of $100, then apply rate per unit.'
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