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Wharfside Manufacturing estimates that its office employees will earn $50,000 next year and its factory employees will earn $260,000. The firm pays the following rates for workers’ compensation insurance: $0.42 per $100 of wages for the office employees and $4.60 per $100 of wages for the factory employees. Compute the estimated premiums for the office and factory employees.

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Answer: $12,170

Explanation :

The company will pay $50,000 to office Employees and insures them at a rate of $0.42 per $100.

The estimated Premium for office Workers;

= 50,000 * 0.42/ 100

= $210

The company will pay $260,000 to Factory Employees and insures them at a rate of $4.60 per $100.

The estimated Premium for Factory Workers;

= 260,000 * 4.60/100

= $11,960

Total Estimated Premium;

= 11,960 + 210

= $12,170

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