A Possible Solution to Overcome Distortions Caused by Unit Level

question 169

Multiple Choice

A possible solution to overcome distortions caused by unit level rates is

• A)assign costs by multiplying activity rates times the amount of activity consumed.
• B)calculate individual rates for each activity with activity drivers.
• C)increase the number of rates used that reflect the diverse activity and nonunit overhead drivers.
• D)all of these.

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Definitions:

Heckscher-Ohlin Theorem

An economic theory stating that countries export what they can most efficiently and abundantly produce.

Labor Intensive

describes industries or production processes that require a large amount of labor relative to capital in the production process.

WTO

The World Trade Organization, an intergovernmental organization that regulates international trade agreements and disputes between nations.

Retaliatory Tariffs

Taxes on imported goods that are imposed in response to similar taxes levied by another country.