Various Market Mechanisms, Such as Assigned Risk Pools and Reinsurance

question 1

Multiple Choice

Various market mechanisms, such as assigned risk pools and reinsurance facilities, allow employers that are considered uninsurable access to workers' compensation insurance.Employers with large losses, as depicted by high experience ratings, are considered high risk.These employers encounter difficulty in finding workers' compensation coverage.The way to obtain coverage is through these involuntary markets.Identify this market.

• A)Secondary market
• B)Complimentary market
• C)Primary market
• D)Sundry market
• E)Residual market

Analyze the effects of different costing methods (plantwide vs. departmental) on job costs.

Understand activity-based costing (ABC) and its application to manufacturing overhead allocation.

Calculate unit product costs using traditional and ABC systems.

Evaluate the impact of unused capacity on overhead rates and costs.

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Definitions:

Operating Cash Flow

The cash generated by a company's normal business operations, indicating whether a company is able to generate sufficient positive cash flow to maintain and grow its operations.

Cash Expenses

These are expenses that require an immediate outlay of cash by the business.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, a fundamental concept in economics and financial decision-making.

Underground Storage

Facilities used for storing various substances below the earth’s surface, often pertaining to fuel and hazardous materials.