Question

the schuler insurance company processed 60,000 claims in march. it takes an average of 6 hours to process each claim. the company incurred $240,000 of labor and $840,000 of overhead costs during march. what was the cost to process each claim?

Answer 1

The Schuler Insurance Company spent $1,080,000 in labor and overhead costs to process 60,000 claims in March. When you divide the total costs by the number of claims, the cost to process each claim comes out to be $18.

Step-by-step explanation:

To calculate the cost to process each claim for the Schuler Insurance Company, we need to total the labor and overhead costs and then divide by the number of claims processed. With $240,000 in labor costs and $840,000 in overhead costs, the total costs for March amount to $1,080,000. Given that the company processed 60,000 claims, we divide the total costs by the number of claims to find the cost per claim.

The calculation is as follows:

• Total costs = Labor costs + Overhead costs
• Total costs = $240,000 + $840,000
• Total costs = $1,080,000
• Cost per claim = Total costs ÷ Number of claims
• Cost per claim = $1,080,000 ÷ 60,000
• Cost per claim = $18

Therefore, the cost to process each claim is $18.