Rachel Is Single and Has a College Degree in Finance

question 107

Multiple Choice

Rachel is single and has a college degree in finance. She is employed as a loan officer at a bank; her yearly AGI approximates $50,000. During the year, she enrolled in a weekend MBA program and incurred the following nonreimbursed expenses: $4,100 (tuition) , $300 (books) , $200 (other school supplies) , and $200 (transportation to and from campus) . Disregarding the 2%-of-AGI limitation, as to the MBA program, Rachel has a:

• A)Deduction for and deduction from AGI of $0.
• B)Deduction for AGI of $4,000 and deduction from AGI of $800.
• C)Deduction for AGI of $4,000 and deduction from AGI of $700.
• D)Deduction for AGI of $4,100 and deduction from AGI of $700.
• E)None of these.

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Definitions:

Job-Order Costing

An accounting method used to track the costs associated with producing a specific job or batch of products.

Manufacturing Overhead

Indirect factory-related costs that are incurred when a product is manufactured, including costs related to utilities, depreciation, and salaries for management.

Adjusted Cost

Adjusted cost refers to the original cost of an asset after adjustments for improvements, depreciation, or amortization, directly affecting its value on the balance sheet.

Direct Materials

The cost of raw materials and components used directly in the production of goods.