D and M Are Divorcing

question 53

Multiple Choice

D and M are divorcing.D loves his two children and agrees to support them with the amount of $500 per month, ending on the later of the child's 18th birthday or 22nd birthday, if the child pursues a full-time college education.He further agrees to pay his ex-wife $1,500 per month for her maintenance and support, ending on her death or remarriage.These agreements are contained in their divorce decree.D pays his ex-wife the $2,000 per month under the terms of the decree, using one check.How much of each $2,000 check is a nondeductible child support expense for D?

• A)$2,000
• B)$500
• C)$0
• D)Cannot figure amount without information on amount wife actually uses for child support

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Definitions:

Direct Labor Time Variance

The difference between the estimated time to produce a good and the actual time taken, often used in cost accounting.

Actual Costs

Actual costs are the expenses that a company incurs for producing goods or services, including materials, labor, and overhead, as opposed to estimated or budgeted costs.

Standard Costs

The predetermined costs of manufacturing a product or providing a service, used as benchmarks against actual costs.

Direct Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected quantity, multiplied by the standard cost per unit of material.