Taxes Collected on the Basis of the Benefits-Received Principle

question 162

Multiple Choice

Taxes collected on the basis of the benefits-received principle:

• A)provide states with their main sources of revenue.
• B)tend to redistribute income from rich to poor.
• C)collect the same total amount from each individual.
• D)connect the revenue side of the budget with the spending side of the budget.
• E)make it possible for government to spend money on activities that markets can't provide.

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Definitions:

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate estimated overhead costs to products or services based on a certain activity base.

Variable Manufacturing Overhead

Costs that fluctuate with production volume, such as utilities for the manufacturing plant.

Fixed Manufacturing Overhead

The portion of fixed costs that is directly associated with the production process, including salaries of managers and factory maintenance.

Predetermined Overhead Rate

An estimated charge used for cost allocation within a budget or accounting period, calculated by dividing the estimated manufacturing overhead costs by an allocation base.