The Case in Point on Terminal Illness and Life Insurance

question 65

Multiple Choice

The Case in Point on Terminal Illness and life insurance discusses an industry called the:

• A)viatical industry, which provides terminally ill people with access to quick cash while they are still alive.
• B)viatical industry, which sells life insurance to sick people.
• C)computer industry, which traces the genealogy of sick people.
• D)life partners industry, which helps people with AIDS find long-term health-care providers.

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Definitions:

Predetermined Overhead Rate

A rate calculated before a period begins, used to apply manufacturing overhead costs to products based on a relevant activity, such as machine hours or labor hours.

Underapplied

Describes a situation where the allocated overhead costs in accounting are less than the actual overhead costs incurred.

Overapplied

A scenario in which the overhead cost assigned to manufacturing exceeds the overhead that was actually incurred.

Direct Labor-Hours

A measure of the labor directly involved in manufacturing a product, represented in hours.