Why Are Group Policies Often Offered at Reduced Premiums

question 21

Multiple Choice

Why are group policies often offered at reduced premiums?

• A)Low marketing costs
• B)Mass volume efficiency
• C)Lower probability of payout by the insurance company.
• D)All of the above
• E)Both a and b

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Definitions:

Raw Materials Inventory

The total cost of all the components lying in a manufacturing or production facility that have not yet been used or processed.

Underapplied Overhead

Occurs when the allocated manufacturing overhead cost is less than the actual overhead incurred, leading to under-recovered expenses.

Manufacturing Overhead

This includes all the indirect costs associated with manufacturing a product, such as utilities, indirect labor, and maintenance of equipment.

Manufacturing Overhead Applied

The process of assigning manufacturing overhead costs to the units produced, based on a predetermined overhead rate.