If a City Is Taxing Property at the Maximum Rate

question 3

Multiple Choice

If a city is taxing property at the maximum rate allowed and then the assessed
valuation of property in the city increases, which of the following can be expected to happen if the state does not allow an increase in the property tax levy?

• A) property tax rates increase.
• B) the property tax levy increases.
• C) coefficients of dispersion increase.
• D) property tax rates decrease.

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Definitions:

Direct Labor Cost

The expense associated with employees who physically convert raw materials into the company's products; considered a variable cost.

Absorption Costing

A method of inventory costing that includes all manufacturing costs, both variable and fixed, in the cost of a product.

Variable Costing

An accounting method that only considers variable costs in determining the cost of goods sold and in calculating contribution margin.

Unit Product Cost

The total expense incurred to produce, store, and sell one unit of a product, including direct materials, direct labor, and manufacturing overhead.