A Worker May Prefer to Be Treated as an Independent

question 40

Multiple Choice

A worker may prefer to be treated as an independent contractor (rather than an employee) for which of the following reasons:

• A)Avoids the overall limitation (50%) as to business meals.
• B)All of the self-employment tax is deductible for income tax purposes.
• C)Work-related expenses of an independent contractor are deductible for AGI.
• D)A Schedule C does not have to be filed.
• E)None of these.

---

Definitions:

Denominator Activity

The level of activity used to allocate fixed costs in a costing system.

Standard Machine-Hours

A metric used to estimate the amount of machine time required for or used during production based on standard rates.

National Distribution

refers to the marketing and transportation of goods across an entire country, ensuring product availability on a nation-wide scale.

Labour Rate Variance

The difference between the actual cost of labor and the expected cost, based on standard rates and actual hours worked.