Which of the Following Statements Is True About Health Savings

question 74

Multiple Choice

Which of the following statements is true about health savings accounts (HSAs) ?

• A)There is no restriction on the kind of health insurance taxpayers must carry in order to qualify for an HSA.
• B)Contributions to HSAs are not deductible for adjusted gross income (AGI), but are treated as an itemized deduction.
• C)Individuals taking distributions from HSAs which are not for medical expenses are subject to a 50 percent penalty.
• D)Distributions from HSAs are tax and penalty free when used for qualified medical expenses.
• E)Taxpayers may take tax and penalty free distributions from HSAs to purchase automobiles after age 65.

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Definitions:

Variable Manufacturing Overhead

Costs of manufacturing that change with production volume, such as utilities or indirect materials, not fixed over the short term.

Machine-Hours

A measure used in manufacturing to allocate costs to products or job orders based on the number of hours a machine is used.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead costs to products, calculated before the production period begins.

Variable Manufacturing Overhead

The portion of variable overhead costs that are directly associated with the manufacturing process, including costs like indirect materials and utilities.