Which of the Following Would Not Result in a Permanent

question 51

Multiple Choice

Which of the following would not result in a permanent difference between pretax financial income and taxable income?

• A) Product warranty costs
• B) Premiums paid for life insurance policies on officers of the company
• C) Interest revenue received from investments in municipal bonds
• D) Percentage depletion in excess of cost depletion on wasting assets

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Definitions:

Direct Labour-Hours

The total hours worked directly on the production of goods, used to allocate labor costs accurately to products.

Variable Manufacturing

Costs that vary directly with the level of production output, such as materials and direct labor costs.

Fixed Manufacturing

Costs associated with the manufacturing process that do not vary with production volume, such as rent, depreciation, and salaries of permanent staff.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the consumption of the asset over time.