Todd and Hillary,husband and Wife,file Separate Returns

question 88

Multiple Choice

Todd and Hillary,husband and wife,file separate returns.Todd and Hillary live in a community property state that considers separate property income to be community income.Todd's salary is $82,000 and Hillary's salary is $80,000.Hillary receives dividend income of $7,000 from stock inherited from her parents.Todd receives interest income of $5,000 from bonds purchased with his salary after marriage.Todd and Hillary receive $10,000 dividend income from stock they purchased jointly.Todd's income would be

• A)$92,000.
• B)$93,000.
• C)$94,500.
• D)$97,000.

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Definitions:

Unit Product Cost

The total cost associated with creating one unit of product, including materials, labor, and overhead.

Variable Costing

An accounting method where only the variable production costs are allocated to the product, while fixed costs are treated as period costs.

Net Operating Income

The total income from operations of a company before taxes and interest deductions.

Variable Costing

An accounting strategy that only accounts for variable production expenditures (direct materials, direct labor, and variable manufacturing overhead) in product pricing.