Analyze damages caused by a fire in Salter Company’s plant.

Hector P. Wastrel, a careless employee, left some combustible materials near an open flame in Salter Company’s plant. The resulting explosion and fire destroyed the entire plant and administrative offices. Justin Quick, the company’s controller, and Constance Trueheart, the operations manager, were able to save only a few bits of information as they escaped from the roaring blaze. “What a disaster,” cried Justin. “And the worst part is that we have no records to use in filing an insurance claim.” “I know,” replied Constance. “I was in the plant when the explosion occurred, and I managed to grab only this brief summary sheet that contains information on one or two of our costs. It says that our direct labor cost this year totaled $180,000 and that we purchased $290,000 in raw materials. But I’m afraid that doesn’t help much; the rest of our records are just ashes.” “Well, not completely,” said Justin. “I was working on the year-to-date income st 1 it when the explosion knocked me o y chair. I instinctively held onto the page I was working on, and from what I can

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