Lois Larson Has Liability Coverage in Her Automobile Insurance Policy

question 89

Short Answer

Lois Larson has liability coverage in her automobile insurance policy of 50/100/50. She was at fault in an accident and two people in another car, Barbara and John Gibbons, were injured. In the lawsuit settlement, Barbara was awarded $30,000 and John, $70,000. Damages to the Gibbons' car amounted to $8,600. How much of the total claim will be Lois's responsibility?

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Definitions:

Unit Product Cost

The total cost (variable and fixed) incurred to produce, store, and sell one unit of a product.

Elastic Demand

Describes a market condition in which the demand for a product is sensitive to price changes.

Target Costing

A pricing strategy in which the selling price and profit margin are used to determine the maximum cost that can be incurred on a product, with the aim of ensuring competitiveness and profitability.

Target Profit

The specific net income a business intends to reach within a designated timeframe.