Which of the Following Conditions Would Turn Some People Intoforced

question 22

Multiple Choice

Which of the following conditions would turn some people intoforced riders?

• A)People who must contribute to the public good because their benefit from the public good is high.
• B)People who must contribute to the public good even though they will not benefit from the public good.(True Answer
• )Correct
• C)People who are not required to contribute to the public good if they will not receive any benefit from it.
• D)None of the answers is correct.

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Definitions:

Period Costs

Costs that are taken directly to the income statement as expenses in the period in which they are incurred or accrued.

Fixed Costs

Expenses that do not change in total despite fluctuations in production or sales volume, such as rent, insurance, and salaries.

Variable Costing

A costing method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product costs.

Common Cost

A cost that is incurred to support a number of cost objects but that cannot be traced to them individually. For example, the wage cost of the pilot of a 747 airliner is a common cost of all of the passengers on the aircraft. Without the pilot, there would be no flight and no passengers. But no part of the pilot’s wage is caused by any one passenger taking the flight.