Terry Files His Return on March 31

question 3

Multiple Choice

Terry files his return on March 31. The return shows taxes of $6,000, and Terry pays this entire amount when he files his return. By what time must he file a claim of refund?

• A)the later of two years from the return filing or three years from the date the tax is paid
• B)the later of three years from the return due date or two years from the date the tax is paid
• C)two years from the payment of tax date, if the IRS mails a notice of deficiency in the third year following the due date of the return
• D)four years from the payment of tax date, if the IRS mails a notice of deficiency

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Definitions:

Manufacturing Overhead

All indirect costs associated with manufacturing, such as indirect materials, indirect labor, and other overhead costs.

Labor Efficiency Variance

The difference between the actual labor hours used and the standard labor hours expected, multiplied by the standard labor rate.

Direct Materials

Raw materials that can be directly traced to the production of specific goods or services.

Direct Labor-Hours

The sum of hours contributed by personnel directly employed in the process of manufacturing.