A Manufacturing Plant Produces Two Product Lines: Golf Equipment and Soccer

question 2

Multiple Choice

A manufacturing plant produces two product lines: golf equipment and soccer equipment. An example of a direct cost for the golf equipment line is ________.

• A) beverages provided daily in the plant break room for the entire staff
• B) monthly lease payments for a specialized piece of equipment needed to manufacture the golf driver
• C) salaries of the clerical staff that work in the company administrative offices
• D) overheads incurred in producing both golf and soccer equipment

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Definitions:

Payroll Tax

Contributions demanded from employers or their staff, often pegged to a percentage of the paychecks disbursed to employees.

Equilibrium Wage

The wage rate at which the quantity of labor demanded by employers equals the quantity of labor supplied by workers.

Payroll Tax

A tax imposed on employers or employees, and is usually calculated as a percentage of the salaries that employers pay their staff.

Tax Collections

The process by which governmental authorities, such as the IRS in the United States, collect taxes from individuals and businesses.