If Your Adjusted Gross Income Is $30,000 and You Contribute

question 96

Multiple Choice

If your adjusted gross income is $30,000 and you contribute $3,000 to a retirement plan in pre- tax dollars,then you will pay income tax on a re- computed adjusted gross income of

• A)$33,000.
• B)$30,000.
• C)$27,000.
• D)none of the above

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Definitions:

Fixed Overhead

Costs that do not change with the level of production or sales activities, such as rent, salaries, and insurance.

Budget Variance

The difference between the budgeted or planned amounts and the actual amounts incurred.

Standard Cost

A predetermined cost of manufacturing a single unit or a number of product units during a specific period under normal conditions.

Variable Overhead

Costs that vary with production volume, such as utilities or materials, which do not remain fixed over time.