Suppose Erie Textiles Can Dispose of Its Waste "For Free

question 76

Multiple Choice

Suppose Erie Textiles can dispose of its waste "for free" by dumping it into a nearby river. While the firm benefits from dumping waste into the river, the waste reduces fish and bird reproduction. This causes damage to local fishermen and bird watchers. At a cost, Erie Textiles can filter out the toxins, in which case local fishermen and bird watchers will not suffer any damage. The relevant gains and losses (in thousands of dollars) for the three parties are listed below. $$\begin{array} { | l | c | c | } \hline & \text { With Filter } & \text { Without Filter } \\\hline \text { Gains to Erie } & \$ 200 & \$ 400 \\\hline \text { Fisherman } & \$ 180 & \$ 50 \\\hline \text { Bird Watchers } & \$ 130 & \$ 25 \\\hline\end{array}$$ Local fishermen and bird watchers would be willing to compensate Erie Textiles ______ for operating with a filter.

• A)up to $310 thousand dollars
• B)no more than $235 thousand dollars
• C)no more than $75 thousand dollars
• D)nothing

Grasp the reasons behind the growing disillusionment with the American government and institutions.

Assess the contributions of youth and counterculture movements to societal changes.

Understand the concept of social scripts and their influence on behavior.

Recognize the importance of physical presence and mere exposure effect in interpersonal attraction.

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Definitions:

Standard Direct Labor-Hours

The estimated amount of labor hours required to produce a unit of product, used in budgeting and variance analysis.

Denominator Level

The activity level used to compute a predetermined overhead rate, often reflecting capacity or expected usage.

Budget Variance

The difference between budgeted figures for a set period and the actual figures achieved.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard cost allocated for the actual level of activity.