Most insurance companies generate revenue in two ways: Charging premiums in exchange for insurance coverage, then reinvesting those premiums into other interest-generating assets. Like all private businesses, insurance companies try to market effectively and minimize administrative costs
Answer:
The contribution margin statement is found below with a contribution margin of $149,800 and operating income of $145100
Explanation:
Contribution Margin Statement
Sales revenue ($720*700) $504000
Variable costs:
Cost of generators($470*700) ($329000)
Commission(5%*$504000) <u> ($25200)</u>
Contribution margin $149,800
Fixed costs
Rent ($3000)
Additional commission <u> ($1,700)</u>
Operating income $145100
Cost of rent is fixed as it is not depended on the quantity of generators sold.
Additional commission is fixed amount,so it is a fixed cost, while costs of buying generators as well as the commission of 5% are both variable costs.
Answer:
$61,071.36
Explanation:
According to the scenario, computation of the given data are as follows,
Value of note = $640,000
So, Carrying value of note on Jan 1, 2020 = $640,000 × 0.71
= $454,400
Prevailing interest rate = 12%
So, Interest for 2020 = $454,400 × 12% = $54,528
Now, Interest revenue for 2021 = ($454,400 + $54,528) × 12%
= $508,928 × 12%
= $61,071.36
Hence, the amount of interest revenue that should be included in Swifty's 2021 income statement is $61,071.36
Answer:
$190,000
Explanation:
Retained earnings are the profits not distributed to shareholders as dividends. In a given period, retained earnings will be the difference between profits and dividends.
I.e., retained earning = profits - dividends.
Therefore, Ending retained earning can be calculated as
Beginning retained earning + profits - dividends.
In this case
retained earnings = $190,000 + $52,000 - $52,000
=$242,000 - $52,000
=$190,000