Final answer:
The expenses like management fees, utilities, and maintenance mentioned in the question are known as Operating expenses in a business context. They encompass both explicit out-of-pocket costs as well as implicit opportunity costs, which are essential for insurance companies and other types of businesses to function effectively. The correct option is D.
Step-by-step explanation:
The expenses of running a business or property, such as management fees, utilities, janitorial service, maintenance, insurance premiums, etc., are referred to as Operating expenses. These costs are critical as they are the day-to-day expenses that companies incur to keep their doors open and include both explicit and implicit costs.
Explicit costs are actual out-of-pocket expenditures for items like wages and rent, while implicit costs represent the opportunity costs of using resources the firm already owns, such as depreciation and the cost of owners' time if a salary is not being drawn.
For insurance companies, these running costs are in addition to the payment of claims and are much less than the premiums received and claims paid out. The expenses of running the business include hiring workers, administering accounts, and processing insurance claims, all of which are considered operating expenses. The correct option is D.