Zach Is Applying for Insurance for His New Home

question 83

Multiple Choice

Zach is applying for insurance for his new home.Which of the following is correct?

• A) He should base the amount of insurance on the price he paid for it.
• B) He should insure the building for its replacement value to receive the full cost of repairing or replacing it.
• C) He should use the actual cash value method for settling claims to receive the full cost of repairing or replacing his personal belongings.
• D) His personal belongings should automatically be covered with his home at 125% of his home's insured amount.
• E) His insured amount should remain the same as long as he lives in his house.

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Definitions:

Spreadsheet

A digital document where data is arranged in rows and columns, commonly used for calculations and data analysis.

Job-Order Costing

An accounting method where costs are assigned to specific jobs or batches, allowing for a detailed tracking of production costs.

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, rent, and salaries for employees not directly involved in production.

Cost of Goods Sold

The immediate expenses linked with producing a company's sold goods, such as materials, labor, and production overhead.