Refer to the Information in Figure 16

question 53

Multiple Choice

Refer to the information in Figure 16.5 below to answer the question(s) that follow. Figure 16.5
Figure 16.5 shows the marginal benefits of emitting pollution for the only two chemical companies in an industry, Alpha Chemicals and Beta Chemicals. Before any tax on pollution emissions is imposed, each company views pollution as being free.
-Refer to Figure 16.5. The government decides to impose a tax on pollution emissions to cut total emissions in this industry in half, and based on this decision it has set the tax at $100 per ton of emissions. The total amount of pollution emissions desired by the government is ________ tons.

• A) 25
• B) 50
• C) 75
• D) 100

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Definitions:

Overapplied Overhead

A situation where the allocated manufacturing overhead costs are higher than the actual overhead expenses incurred.

Raw Materials

The basic materials from which products are made, which have not yet been processed or used in manufacturing.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product.

Indirect Materials

Materials used in the production process that cannot be directly linked to a specific product, such as lubricants and cleaning supplies used on machinery.