Which One of the Following Would Be an Example of a Rating

question 2

Multiple Choice

Which one of the following would be an example of a rating territory that helps determine insurance rates?

• A)Paul Carter drives a 2002 Volkswagen Eurovan.
• B)Mary Williams is 73 years old.
• C)Kathy Smith lives in Guthrie,Oklahoma.
• D)Jeremy Davis is married.
• E)John Brown has had three speeding tickets in five years.

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Definitions:

Activity-Based Costing

An accounting method that assigns costs to products based on the activities they require, such as ordering materials or setting up machinery.

Product Costs

Encompasses all costs incurred to create a product, including direct materials, direct labor, and manufacturing overhead.

Direct Labor

The expenses related to the salaries of workers who are actively engaged in creating products or providing services.

Direct Materials

Raw materials that are directly involved in the production of a product and can be easily traced to it.