Tessa Is a Self-Employed CPA Whose 2015 Net Earnings from Her

question 33

Multiple Choice

Tessa is a self-employed CPA whose 2015 net earnings from her business (before the H.R.10 plan contribution but after the deduction for one-half of self-employment taxes) is $400,000.What is the maximum contribution that Tessa can make on her behalf to her H.R.10 (Keogh) plan in 2015?

• A)$100,000
• B)$80,000
• C)$66,250
• D)$53,000

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Definitions:

Direct Labor Costs

Expenses related to employees who directly produce a product or provide a service, such as wages for assembly line workers.

Work in Process Inventory

Inventory that includes materials and labor that are currently in the production process but not yet completed.

Materials Price Variance

The difference between the actual cost of direct materials and the standard cost, reflecting how effectively a company is purchasing materials.

Materials Quantity Variance

A financial metric used in cost accounting to measure the difference between the actual quantity of materials used in production and the expected quantity.