-If a Sales Tax Is Imposed on a Product,which of the Following

question 2

Multiple Choice

-If a sales tax is imposed on a product,which of the following statements is correct?

• A)If the demand for the product is inelastic,the seller will pay a larger percentage of the tax than will the consumer.
• B)If the demand for the product is elastic,the seller will pay a smaller percentage of the product than will the consumer.
• C)The consumer will pay 100% of the tax.
• D)If the demand for the product is inelastic,the consumer will pay a larger percentage of the tax than will the seller.

---

Definitions:

Cost Allocation

The distribution or assignment of indirect, common, or joint costs to different departments, processes, or products within an organization.

Step-Down Method

A cost allocation method used in accounting that allocates overhead costs to cost objects in a sequence, where each department allocates its costs to other departments based on a predetermined order.

Allocation Sequence

The order or process by which costs or resources are distributed among various departments or projects.