Which of the Following Is Representative of the Policy Rationale

question 54

Multiple Choice

Which of the following is representative of the policy rationale with regard to the remoteness test?

• A) to compensate the appropriate party for decreased risk
• B) to encourage the purchase of liability insurance coverage
• C) to avoid unlimited liability for consequences of breach
• D) to prevent one party from turning down the prospective job

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Definitions:

Indirect Costs

Expenses that are not directly attributable to the production of goods or delivery of services but are necessary for the operation of a business, such as utilities or rent.

Cost Object

Anything for which a separate measurement of costs is desired, such as a product, service, project, or activity.

Upstream Cost

Expenses related to the exploration, development, and production phases in industries such as oil and gas.

Marketing

The process of promoting, selling, and distributing a product or service, including market research and advertising.