What Is an Example of a Normative Criterion That a Government

question 32

Multiple Choice

What is an example of a normative criterion that a government must trade-off in its method of taxation

• A) Equity
• B) Efficiency
• C) Administrative ease
• D) all of the above

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Definitions:

Standard Overhead Rate

The rate at which indirect costs are allocated to products or services based on a pre-determined basis, such as labor hours or machine hours.

Direct Labour Hour

A measure of the amount of time workers spend on a specific task, directly involved in the production of goods or services.

Standard Costing System

A cost accounting system that estimates the cost of products in advance, based on standard inputs of materials, labor, and overhead.

Variable Costing

An accounting method that only includes variable production costs in product costs, excluding fixed overhead.