Activity-base usage data for each line of insurance were retrieved from the corporate records and are shown below. Auto Workers Comp. Homeowners Number of new policies Number of canceled policies 1,500 1,450 4,100 350 250 Number of audited claims Number of claim disbursements 320 400 2,000 700 750 100 180 Number of premiums collected 7500 1,500 12,000 a. Complete the product profitability report through the administrative activities. b. Determine the underwriting income as a percent of premium revenue. . Determine the operating income as a percent of premium revenue, rounded to one decimal place. d. Interpret the report.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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