Ellen, Who Has a Good Driving Record, Purchases Automobile Insurance

question 35

Multiple Choice

Ellen, who has a good driving record, purchases automobile insurance from an insurance company. Ellen cannot assign her rights to be insured to another driver for which of the following reasons?

• A) The assignment would materially alter the risk and duties of the insurance company.
• B) Claiming insurance is a future right and hence cannot be assigned.
• C) Insurance is a personal service contract and hence cannot be assigned.
• D) Personal contracts like insurance are assignable only with the agreement of all parties involved in the contract.

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Definitions:

Favorable Spending Variance

A situation where the actual spending is less than the budgeted or expected amount.

Indirect Materials

Small items of material such as glue and nails that may be an integral part of a finished product, but whose costs cannot be easily or conveniently traced to it.

Flexible Budget

A budget that varies or adapts based on fluctuations in activity or volume levels.

Indirect Materials Cost

The cost of materials used in the production process that cannot be directly traced to the product, such as lubricants and cleaning supplies.