Exam Exercise One - 4 (Regressive Taxes)

question 66

Essay

Exam Exercise One - 4 (Regressive Taxes)
Samantha Taylor has Taxable Income for the current year of $625,000, of which $216,000 is spent on goods and services that are subject to Harmonized Sales Tax (HST) at a rate of 13 percent.Her sister, Martha Taylor, is a part-time student living in the same province and has Taxable Income of $12,000.During the current year, as a result of using some of her savings, she spends $21,400 on goods and services that are all subject to HST.
Determine the effective sales tax rate as a percentage of the income of the two sisters.

Understand common bases for allocating factory overhead and their implications.

Understand the concept of activity-based costing (ABC) and its importance in accurately assigning costs to products.

Calculate factory overhead rates for both single plantwide and multiple production department methods.

Identify and analyze activity rates and costs associated with different activity pools.

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Definitions:

Sales Value

The total revenue attained from goods or services sold, calculated by multiplying the selling price by the number of units sold.

Absorption Costing

A costing method where all manufacturing costs, both fixed and variable, are allocated to products, thus "absorbing" them into the cost of goods sold.

Markup

The supplementary amount factored into the base price of goods to address fixed costs and earnings, influencing their final selling point.

Selling Price

The price a consumer disburses to obtain a product or service from a merchant.