1 
USE AND OCCUPANCY INSURANCE 
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amount should not include any labor cost or overhead 
expense which should be properly left in the amount to 
be used as a basis for estimating Use and Occupancy 
insurance needs of the next fiscal year. 
B3—The amount inserted here represents the total 
value to be accounted for in respect to the past fiscal 
year’s operations. 
Bs—The amount entered here represents the value 
of all stock, materials, and supplies on hand at the end 
of the past fiscal year’s operations after due considera- 
tion has been given to actual depreciation or apprecia- 
tion. 
B5—The amount entered here is the difference be- 
tween B3 and B4 which results in the net value to be 
accounted for in respect of the past fiscal year’s opera- 
tions. 
B6—The amount entered here represents those costs 
which do not enter into the net cost of purchases and 
yet are not to remain in the basis for estimating Use and 
Occupancy insurance coverage. Principal among these 
are bad debts, inter-departmental purchases which 
might produce a fictitious net Sales figure, or disburse- 
ments in respect of some non-operating expense which 
are actually offset by non-operating income, but are 
charged on the books against operating income. The 
items entered here, if any, will differ in each class of 
business and must receive careful consideration. 
B7—The amount entered here represents the sum of 
Bs and B6 or the total amount to be deducted from 
Income. 
Cr—The amount entered here represents the differ- 
ence between the amount entered under Step A3 
(Operating Income) and Step B7 (Deductions). This 
difference 1s the amount from which all salaries, wages, 
overhead charges and expenses of the business were 
paid before the operating net profit for the past fiscal 
year could be established. This result is the actual 
amount which retrospectively would have been used as 
a Basis for Use and Occupancy insurance to cover the 
earnings of a past fiscal year. 
C2—The amount entered here represents the pro- 
spective increase (or decrease) in the actual amount (Cr 
as produced by a past fiscal year’s operations) to con- 
template the next fiscal year’s operations. 
Step “cr  -— 
Basis for 
Insurance