Five-Stars insurance Company carries three major lines of insurance: auto, workers' compensation, and homeowners. The company has prepared the following report: Five-Stars Insurance Company Product Profitability Report For the Year Ended December 31 Management is concemed that the administrative expenses may make some of the insurance lines unprofitable. However, the administrative expenses have not been allocated to the insurance lines. The controller has suggested that the administrative expenses could be assigned to the insurance lines using activity-based costing. The administrative expenses are comprised of five activities. The activities and thelr rates are as follows: Activity base usage data for each line of insurance were retrieved from the corporate records as follons: Activity-base usage data for each line of insurance were retrieved from the corporate records as follows! a. Complete the product profitability report through the administrative activities. Determine the operrating income as a percent of premium revenue. Rounded to the nearest whole percent. b. Interpret the report. All three insurance lines have. percentage of underwriting income to premium revenue. The differences among the insurance lines are in the way they consume activities. The insurance line has the profitability becavise it has frequent claims that require more auditing and disbursement processing than do the other two lines. In addition. the Homeowners line has a much higher rate of cancellation relative to the other two lines (over 50b of new policies). Lastly, the Homeowners line has more premium coliections compared to the other two lines. Posalbly, the Homeowners line is collected in smaller amounts from more customers than the other two lines. In contrast. the line consumes the administrative activities, cauting it to be very profitabie. The Auto line is in between these two