Page 345 - Fire Insurance Ebook IC 57

The Insurance Times

production and sales, there can be interruption
of production without any immediate or
corresponding reduction in turnover.

Q6. Discuss the concept of difference basis of the
specification with relevant provisions.

Ans. Gross profit may be arrived at ,on 'difference basis'.
Under this basis, Gross Profit is the amount by which
(i) The sum of the Turnover and the amount of the
Closing Stock exceeds and
(ii) The sum of the amount of Opening and the amount
of the Specified Working Expenses.

Specified Working Expenses includes : 358
(i) All Purchases (less discounts)
(ii) % of the Annual Wage Roll
(iii) Power
(iv) Consumable Stores
(v) Carriage
(vi) Packing Material
(vii)Bad Debts
(viii)Discounts Allowed and
(ix) Any other specified expenses.

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