Activity-Based Costing for a Service Company y carries three major lines of insurance: auto, workers' compensation, and homeowners. The company has prepared the following report Safety First Insurance Compan Safety First Insurance Company Product Profitability Report For the Year Ended December 31 Workers Auto Homeowners Premium revenue Estimated claims Underwriting income Underwriting income as a percent of premium revenue $5,750,000 4,312,500 $1,437,500 25% $6,240,000 4,680,000 $1,560,000 2S% $8,160,000 6,120,000 $2,040,000 25% Management is concerned that the administrative expenses may make some insurance lines. The controller has suggested that the administrative expenses could be assigned comprised of five activities. The activities and their rates are as follows have not been allocated to the to the insurance lines using activity-based costing. The administrative expenses are of the insurance lines unprofitable. However, the administrative expenses Activity Activity Rates New policy processing Cancellation processing Ciaim audits Claim disbursements processing Premium collection processing $120 per new policy $175 per cancellation $320 per claim audit $104 per disbursement 24 per premium collected usage data for each line of Insurance wereof insurance were retrieved from the corporate records as follows: retrieved from the corporate records as follows Workers Compensation Auto Homeowners