R Is Employed as a Painter for Painting-We-R

question 28

Multiple Choice

R is employed as a painter for Painting-We-R.He lives in Dallas and works on jobs in the surrounding area.
1.R is assigned to a job in Ft. Worth for one week, causing him to commute daily a total of 80 miles, which is 60 miles further than his normal commute. R may deduct the cost of commuting 80 miles.
2.R travels 100 miles to Waco for a two-day job and stays overnight. He may deduct, at least in part, the costs of his own meals while there.
3.R carries a few tools in his light duty truck including paint brushes, paint, a ladder, and the like. Assuming R would drive the truck with or without the tools, he is allowed to deduct the costs of commuting under the IRS view.
Which set of the above statements is true?

• A)1. and 2.
• B)1., 2. and 3.
• C)2.
• D)2. and 3.
• E)3.

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Definitions:

Standard Amount

The budgeted or pre-determined cost of materials, labor, and overhead that is used as a benchmark for actual costs.

Variable Manufacturing Overhead

The segment of manufacturing overhead expenses that fluctuates in relation to the volume of production output.

Actual Output

The real quantity of goods or services produced by a company, as opposed to planned or potential output.

Labor Efficiency Variance

The difference between the actual hours worked and the hours that should have been worked, considering the standard labor rate. It measures labor productivity.