If an employee works 40 hrs / week for four weeks and insurance costs $ 147.20 / month, how much is the insurance cost per hour for the employee?

If an employee works 40 hrs / week for four weeks and insurance costs $ 147.20 / month, how much is the insurance cost per hour for the employee?

• A. $0.50
• B. $0.72
• C. $0.92
• D. $1.00

Answer: (C)

Spreading a fixed monthly cost over the hours worked to find an hourly rate. First, compute total hours in the period: 40 hours per week for four weeks = 160 hours. Then divide the monthly insurance cost by these hours: 147.20 ÷ 160 = 0.92. So the insurance cost per hour is $0.92. This makes sense because you’re allocating a flat monthly expense evenly across all hours the employee works in that four-week period. If you tried the other numbers, they wouldn’t match the $147.20 total for 160 hours (for example, 0.50 per hour would total $80, 0.72 per hour would total $115.20, and 1.00 per hour would total $160).

Spreading a fixed monthly cost over the hours worked to find an hourly rate.

First, compute total hours in the period: 40 hours per week for four weeks = 160 hours. Then divide the monthly insurance cost by these hours: 147.20 ÷ 160 = 0.92. So the insurance cost per hour is $0.92.

This makes sense because you’re allocating a flat monthly expense evenly across all hours the employee works in that four-week period. If you tried the other numbers, they wouldn’t match the $147.20 total for 160 hours (for example, 0.50 per hour would total $80, 0.72 per hour would total $115.20, and 1.00 per hour would total $160).