A Florida job posts $64,000 of carpentry labor. The workers' compensation manual rate for that class is $7.40 per $100 of payroll. What premium should be accrued for that labor?
Correct Answer
A) $4,736
There are 640 units of $100 payroll. At $7.40 per unit, the premium is $4,736.
Why This Is the Correct Answer
There are 640 units of $100 payroll. At $7.40 per unit, the premium is $4,736.
Why the Other Options Are Wrong
Option B: $4,352
$4,352 is below the supported result for workers' compensation accrual; it likely skips a premium-pay or employer-cost component.
Option C: $5,184
$5,184 is above the supported result for workers' compensation accrual; it likely pays the wrong premium tier or counts the same hours twice.
Option D: $5,920
$5,920 is above the supported result for workers' compensation accrual; it likely pays the wrong premium tier or counts the same hours twice.
Memory Technique
Who controlled there, who paid units, where is the Adding Insurance record?
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Section Two, Payroll Accounting, Accounting for Tax Liabilities; use the job ledger figures in the stem and recompute the same accounting measure.
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