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One of Stine Company's Activity Cost Pools Is Machine Setups

question 53

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One of Stine Company's activity cost pools is machine setups, with estimated overhead of $360,000. Stine produces sparklers (400 setups) and lighters (600 setups) . How much of the machine setup cost pool should be assigned to sparklers?

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Definitions:

Elasticity

A measure of how much the quantity demanded or supplied of a good changes in response to a change in price or other economic variable.

Buyer

A person or entity that purchases goods or services from another in exchange for money.

Tax

A non-optional financial assessment or alternate form of contribution demanded from a taxpayer by a governmental administration for the purpose of allocating funds for government usage and various public expenditure needs.

Market Period

A very short period of time in which the supply of a good is fixed, typically because the time frame is too short to alter production.

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