Racine Started a New Business in the Current Year

question 38

Multiple Choice

Racine started a new business in the current year. She incurred $52,000 of start-up costs.If her business started on November 23rd of the current year, what is the total expense she may deduct with respect to the start-up costs for her initial year, rounded to the nearest whole number?

• A) $5,522
• B) $52,000
• C) $2,555
• D) $3,544
• E) None of the choices are correct.

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Definitions:

Fixed

Refers to costs or expenses that do not change in proportion to the level of activity or production volume, such as rent or salaries.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to individual units of production, calculated before the production process begins.

Accuracy

The degree to which the result of a measurement, calculation, or specification conforms to the correct value or a standard.