For the Year Ended December 31Premium revenueEstimated claimsUnderwriting income.Underwriting income as a percent ofpremium revenueActivityNew policy processingCancellation processingClaim auditsClaim disbursements processingPremium collection processingNumber of new policiesNumber of canceled policiesNumber of audited claimsNumber of claim disbursementsNumber of premiums collectedAuto$5,800,000(4,060,000)$1,740,000Management is concerned that the administrativexpenses may make some of the insurance linesnprofitable. However, the administrative expenses havenot been allocated to the insurance lines. The controllerhas suggested that the administrative expenses could beassigned to the insurance lines using activity-basedcosting. The administrative expenses are comprised offive activities. The activities and their rates are asfollows:AutoPremium revenueEstimated claimsUnderwriting incomeAdministrative activities:New policy processing1,3304903904708,50030%Activity-base usage data for each line of insurance wereretrieved from the corporate records as follows:Activity Rates$110 per new policy$180 per cancellation$330 per claim audit$100 per disbursement.$25 per premium collectedWorkers'Compensation$6,250,000(4,375,000)$1,875,000$$30%Workers'Compensation1,4003001102201,900Bounce Back Insurance CompanyProduct Profitability ReportFor the Year Ended December 31a. Complete the product profitability report through theadministrative activities. Determine the operatingincome as a percent of premium revenue. Rounded tothe nearest whole percent.AutoHomeownersHomeowners$8,200,000(5,740,000)$2,460,000Workers'Comp.4,1002,20095085015,200$30%Homeowners

Profit is the amount of revenue that remains after accounting for all expenses, debts and other…

Premium revenue Estimated claims For the Year Ended December 31 Workers' Compensation $6,250,000 (4,375,000) $1,875,000 Underwriting income Underwriting income as a percent of premium revenue Activity New policy processing Cancellation processing Auto Claim audits Claim disbursements processing Premium collection processing $5,800,000 (4,060,000) $1,740,000 30% 30% Management is concerned that the administrative penses may make some of the insurance lines nprofitable. However, the administrative expenses have not been allocated to the insurance lines. The controller has suggested that the administrative expenses could be assigned to the insurance lines using activity-based costing. The administrative expenses are comprised of five activities. The activities and their rates are as follows: Activity Rates $110 per new policy $180 per cancellation $330 per claim audit $100 per disbursement $25 per premium collected Homeowne $8,200,00 (5,740,00 $2,460,00 3C Activity-base usage data for each line of insurance were

Premium revenue Estimated claims For the Year Ended December 31 Workers' Compensation $6,250,000 (4,375,000) $1,875,000 Underwriting income Underwriting income as a percent of premium revenue Activity New policy processing Cancellation processing Auto Claim audits Claim disbursements processing Premium collection processing $5,800,000 (4,060,000) $1,740,000 30% 30% Management is concerned that the administrative penses may make some of the insurance lines nprofitable. However, the administrative expenses have not been allocated to the insurance lines. The controller has suggested that the administrative expenses could be assigned to the insurance lines using activity-based costing. The administrative expenses are comprised of five activities. The activities and their rates are as follows: Activity Rates $110 per new policy $180 per cancellation $330 per claim audit $100 per disbursement $25 per premium collected Homeowne $8,200,00 (5,740,00 $2,460,00 3C Activity-base usage data for each line of insurance were

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Please do not give solution in image format thanku
Denison Specialty Hospital Operating Budget For Year Ending Last Day of Next Year Revenues Net Patient Revenue $7,980,000 Gift Shop Revenue 120,000 Endowment Income 50,000 Total Budgeted Revenue $8,150,000 Expenses Salaries $6,900,000 Supplies 540,000 Bad Debts 380,000 Rent 300,000 Depreciation Expense 100,000 Interest Expense (122,647) Total Budgeted Expense 8,097,353 Budgeted Excess of Revenues over Expenses $52,647
Do not give answer in image
Please do not give solution in image format thanku
Required information The Foundational 15 (Algo) (LO9-1, LO9-2, LO9-3] [The following information applies to the questions displayed below] Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element per Month $ 53,000 $32,000 Variable Element per Customer Served $5,400 $ 1,400 $750 Actual Total for May $ 203,000 $108,500 $ 27,700 $ 30,000 When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually served 40 customers. Foundational 9-9 (Algo) 9. What is Adger's other expenses spending variance for May? (Indicate the effect of each variance by selecting "F" for favorable. "U" for unfavorable, and "None" for no effect (i.e., zero…
None
Solaris Corporation prepared the following estimates for the four quarters of the current year: Second Quarter Fourth Quarter Third Quarter 2,100,000 600,000 $ 2,400,000 $ 1,800,000 530,000 205,000 210,000 180,000 Sales Cost of goods sold Administrative costs Advertising costs Executive bonuses Provision for bad debts Annual maintenance costs. Additional Information First Quarter $ 1,500,000 450,000 350,000 0 0 0 80,000 0 0 0 $ 0 0 0 0 650,000 220,000 92,000 72,000 0 • First-quarter administrative costs include the $200,000 annual insurance premium. • Advertising costs paid in the second quarter relate to television advertisements that will be broadcast throughout the entire year. No special items affect income during the year. • The company estimates an effective income tax rate for the year of 25 percent. a. Assuming that actual results do not vary from the estimates provided, determine the amount of net income to be reported each quarter of the current year. b. Assume that actual…
Determine the maintained markup percent for the suit department that has the following planned figures: Employee discounts of 8%, Shortages of 2%, markdowns of $6000, Initial markup of 48% and Net sales of $300,000.
None
Please do not give solution in image format thanku