Rex Has the Following AMT Adjustments: -Depreciation of Real Property

question 45

Multiple Choice

Rex has the following AMT adjustments: -Depreciation of real property acquired in 1996 using MACRS is $22,000 while depreciation for AMT purposes is $15,000.
-R&E expenditures amounting to $60,000 are expensed.
The net adjustment is

• A)$7,000.
• B)$54,000.
• C)$61,000.
• D)$67,000.

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Definitions:

Facility-Level Activity

Operations and actions at the plant or facility level that are necessary for production but not tied to specific units produced.

Batch-Level Activity

Operations or tasks that are performed for each batch of goods produced, irrespective of the overall production volume.

Direct Labour-Hours

The total hours of labor directly involved in production, used to allocate costs or measure productivity.

Traditional Costing System

A cost allocation system that assigns costs to products based on an average overhead rate, without the detailed processes of activity-based costing.