​In 2015, a Taxpayer Purchases a New Automobile (5 Year

question 103

Multiple Choice

​In 2015, a taxpayer purchases a new automobile (5 year recovery) for $56,000 for 100% use in her business. What is the total cost recovery assuming that the taxpayer does or does not elect bonus depreciation on the auto (half-year convention but no immediate expensing) ?

• A)​$11,200 with bonus and $3,160 without bonus
• B)​$11,160 with bonus and $11,200 without bonus
• C)​$11,160 with bonus and $3,160 without bonus
• D)​$8,000 with bonus and $3,160 without bonus

---

Definitions:

Aggregating

The process of combining multiple items, data points, or aspects into a single group or category for the purposes of analysis or reporting.

Fixed Ordering

A procurement method in which orders are placed at regular intervals regardless of the inventory level, often leading to a cyclical inventory pattern.

Transportation Costs

Transportation costs are expenses associated with transporting goods from one location to another, impacting the final price of products.

Lot Size

The quantity of items that are processed, ordered, or produced as a single batch or unit.