A Tennessee contractor has 8 employees working on a residential project. The total weekly payroll is $6,400. If the workers' compensation rate for residential construction is $8.50 per $100 of payroll, what is the weekly workers' compensation premium?
Correct Answer
C) $544.00
Premium = ($6,400 ÷ $100) × $8.50 = 64 × $8.50 = $544.00
Why This Is the Correct Answer
Option C is correct because workers' compensation premiums are calculated by dividing the total payroll by $100, then multiplying by the rate per $100. With a $6,400 weekly payroll and a rate of $8.50 per $100, the calculation is: ($6,400 ÷ $100) × $8.50 = 64 × $8.50 = $544.00. This follows the standard workers' compensation premium calculation formula used in Tennessee.
Why the Other Options Are Wrong
Option A: $425.60
$425.60 appears to result from an incorrect calculation, possibly using the wrong rate or making an arithmetic error in the multiplication step. This amount is significantly lower than the correct premium calculation would yield.
Option B: $753.60
$753.60 is too high and likely results from either using an incorrect rate (possibly $11.78 per $100) or making a calculation error. This doesn't match the standard workers' compensation formula with the given parameters.
Option D: $612.80
$612.80 suggests a calculation error, possibly multiplying by an incorrect rate of approximately $9.58 per $100 instead of the given $8.50 rate, or making an arithmetic mistake in the process.
Memory Technique
Remember 'Divide by 100, then Multiply' - D100M. Workers' comp rates are always 'per $100 of payroll,' so you must first convert total payroll to hundreds, then apply the rate.
More tn-supplement Questions
Calculate the Tennessee workers' compensation premium for a roofing contractor with a $180,000 annual payroll and a rate of $28.50 per $100 of payroll:
How many hours of continuing education are required for Tennessee contractor license renewal?
Calculate the workers' compensation experience modification factor for a contractor with $85,000 in expected losses and $68,000 in actual losses:
Under Tennessee lien law, what is the maximum time limit to enforce a mechanics lien after it has been filed?
Under Tennessee lien law, which party has priority when multiple liens are filed against the same property?
Under Tennessee building codes, what is the maximum allowable deflection for a residential floor joist with a 16-foot span under live load?
A homeowner in Nashville hires an unlicensed contractor for $8,000 worth of electrical work. The contractor demands payment but the work fails inspection. Under TCA 62-6, what recourse does the unlicensed contractor have?
Under Tennessee building codes, what is the minimum ceiling height required for habitable rooms in residential construction?
A contractor is installing a septic system for a new home in rural Tennessee. The estimated cost is $8,500. According to TCA 62-6, what licensing requirement applies?
A Tennessee residential contractor fails to complete a $45,000 project and disappears. The homeowner files a claim with the Recovery Fund. What is the maximum recovery amount available?
People Also Study
Business & Financial Management
120 questions · 70% to pass
Contract Administration
60 questions · 70% to pass
Project Management
60 questions · 70% to pass
Related Study Resources
Previous Question
A Tennessee contractor receives a complaint filed with the state licensing board alleging poor workmanship. The contractor fails to respond within the required timeframe. What is the potential consequence?
Next Question
According to Tennessee building codes, what is the maximum allowable deflection for a residential floor joist under live load?