Questions by wmoore - Page 29
A global insurance company, Global, sells auto insurance online. The company uses its own underwriters and proprietary software algorithms to make determinations on pricing and coverage. Currently, the company also services the policies in case of a claim. Global's Chief Operating Officer, Jane, is trying to decide if it makes sense to outsource the claims function, which is currently provided at a fixed cost of $1,780,000 and a variable cost of $490 per claim. Jane estimates that if she were to outsource her claims servicing function to another provider she would incur a fixed annual fee of $1,130,000 plus $540 per claim, Last year, 1,120,000 claims were serviced. a. What was the cost last year to Jane when doing the claims management in-house? Cost last year $______ b. What would the cost have been last year had she outsourced this function? Cost last year $____ c. What is the indifference point for the two alternatives? Indifference point______ claims d. If Jane estimates her claims will rise to 1,210,000 next year, should she outsource the function?____
Dalton Industries makes all purchases on account, subject to the following payment pattern: Pald in the month of purchase: 30% Paid in the first month following purchase: 60% Paid in the second month following purchase: 10% If purchases for January, February, and March were $198,000,$178,000, and $228,000, respectively, what were the firm's budgeted payments in March? Multiple Choice $68,400. $136,800. $175,200