Which of the Following Pools Would Be the WORST Subject

question 45

Multiple Choice

Which of the following pools would be the WORST subject for a fully-funded self-insurance arrangement?

• A)10,000 U.S. postal vehicles in Nevada, each unit worth $18,000
• B)500 U.S. Post Offices in Nevada, average value is $1,250,000 per office
• C)80,000 outdoor U.S. post office mail boxes, each unit worth $200
• D)$50,000 life insurance on all postal employees in Nevada who could pass a medical exam (over 3,000 postal employees)

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Definitions:

Selling Price

The amount for which something is sold, establishing the revenue a company receives from the sale of a product or service.

Direct Materials Budget

A financial plan that estimates the raw materials required for production and the associated costs based on forecasted sales.

Raw Materials

The basic, unprocessed elements or ingredients used in the manufacturing process to create finished goods.

Production Schedule

It is the timeline and plan for the manufacturing process, detailing when and how products will be produced.