Reference: Ref 9-5 (Figure: a Tariff on Imports) Refer to the Figure

question 12

Multiple Choice

Reference: Ref 9-5 (Figure: A Tariff on Imports) Refer to the figure. Suppose the government intervenes with a $2 tariff; the total cost of the tariff to the citizens in that country is:

• A) $350 million.
• B) $400 million.
• C) $550 million.
• D) $700 million.

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Definitions:

Standard Factory Overhead Rate

A predetermined rate used to allocate expected overhead costs to individual units of product based on a standard cost system.

Machine Hour

A unit of measure representing one hour of work or operation by a machine, used in allocating manufacturing costs.

Normal Capacity

The average production or performance level achievable under normal conditions by a business over a specific period.

Fixed Factory Overhead Volume Variance

A measure in management accounting that analyzes the difference between the budgeted and actual volume of production, affecting fixed overhead costs.