John and His Family Were Living in New Jersey When

question 43

Multiple Choice

John and his family were living in New Jersey when he accepted a full-time job in Philadelphia.During the week, John lives in a rental apartment in Philadelphia that is within walking distance of his office; on weekends he drives home to be with his family in New Jersey where he also does a few hours of consulting work.Where is John's tax home?

• A)Philadelphia
• B)New Jersey
• C)He can choose either Philadelphia or New Jersey
• D)Clay has no tax home.

---

Definitions:

Fixed Costs

Costs that remain constant regardless of the amount of goods produced or sold, including expenses like rent, wages, and insurance premiums.

Operating Income

measures a company's profit after deducting operating expenses like wages and cost of goods sold, but before interest and taxes.

Unit Selling Price

The price for which a single unit of a product is sold, not including discounts or promotions.

Unit Variable Costs

Costs that vary directly with the level of production or output, unlike fixed costs, which remain constant regardless of production volume.