Individuals Renting Out Rooms in Their Home for Overnight Stays

question 19

Multiple Choice

Individuals renting out rooms in their home for overnight stays, individuals jointly owing a car with other owners, and individuals who give rides to people who call or text them are creating "new" liability exposures for insurers. The social change that creates these new liability exposures is called

• A) the millennial generation.
• B) the baby boom factor
• C) the greying of America.
• D) the sharing economy.

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Definitions:

Gross Margin

A company's net sales revenue minus its cost of goods sold (COGS), expressed as a percentage. It reveals how much profit a company makes before expenses.

Relevant Range

The range of activity within which the assumptions about fixed and variable cost behaviors hold true.

Fixed Manufacturing Cost

Costs that do not vary with the level of production, such as rent, salaries of permanent employees, and depreciation of factory equipment.

Manufacturing Overhead Cost

The total of all costs associated with manufacturing beyond direct materials and direct labor, including indirect expenses such as maintenance and factory utilities.