Vertical, Inc

question 35

Multiple Choice

Vertical, Inc., has a 2019 net § 1231 gain of $67,000 and had a $22,000 net § 1231 loss in 2018.For 2019, Vertical's net § 1231 gain is treated as:

• A)$45,000 long-term capital gain and $22,000 ordinary loss.
• B)$67,000 ordinary gain.
• C)$45,000 long-term capital gain and $22,000 ordinary gain.
• D)$67,000 capital gain.
• E)None of these.

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Definitions:

Machine Hours

A measure of production time, calculated by counting the number of hours machines are operating.

Semivariable Cost

Expenses that have both fixed and variable components, changing in total with activity level but not proportionally.

Total Cost

The sum of all costs associated with the production or acquisition of goods or services, including fixed and variable costs.

Cost Driver Rate

A rate that identifies the cost per unit of activity for a particular cost driver, aiding in the allocation of overhead costs based on actual usage or consumption.