Great benefit inc., a reputed private insurance company, launched a new health insurance scheme for life-saving surgeries about a year back. the company had set the premiums based on the assessment of its risk analysis team that only 2 percent of the people who buy private insurance would submit a claim each year. however, at the end of the first year, higher number of claims on this policy had a negative impact on the company's profits. which of the following, if true, would explain this outcome?
a. great benefit, like most health insurance companies, insisted on a 20 percent coinsurance. b.the cost of life-saving surgeries remained unchanged during the year. c.the country's government requires all citizens to be covered by private health insurance. d.great benefit limited coverage of pre-existing conditions, which are medical problems that the buyer already has before purchasing the insurance. e.great benefit set higher premiums than the competition, but covered a larger number of critical illnesses.

Lynch company manufactures and sells a single product. the following costs were incurred during the company’s first year of operations: variable costs per unit: manufacturing: direct materials $ 12 direct labor $ 6 variable manufacturing overhead $ 1 variable selling and administrative $ 1 fixed costs per year: fixed manufacturing overhead $ 308,000 fixed selling and administrative $ 218,000 during the year, the company produced 28,000 units and sold 15,000 units. the selling price of the company’s product is $56 per unit. required: 1. assume that the company uses absorption costing: a. compute the unit product cost. b. prepare an income statement for the year. 2. assume that the company uses variable costing: a. compute the unit product cost. b. prepare an income statement for the year.

Fanning company is considering the addition of a new product to its cosmetics line. the company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. relevant information and budgeted annual income statements for each of the products follow. skin cream bath oil color gel budgeted sales in units (a) 110,000 190,000 70,000 expected sales price (b) $8 $4 $11 variable costs per unit (c) $2 $2 $7 income statements sales revenue (a × b) $880,000 $760,000 $770,000 variable costs (a × c) (220,000) (380,000) (490,000) contribution margin 660,000 380,000 280,000 fixed costs (432,000) (240,000) (76,000) net income $228,000 $140,000 $204,000 required: (a) determine the margin of safety as a percentage for each product. (b) prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. (c) for each product, determine the percentage change in net income that results from the 20 percent increase in sales. (d) assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? (e) assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line?

Under t, the point (0,2) gets mapped to (3,0). t-1 (x,y) →