Austin, a Single Individual with a Salary of $100,000, Incurred

question 119

Essay

Austin, a single individual with a salary of $100,000, incurred and paid the following expenses during 2019: $$\begin{array} { l r } \text { Medical expenses } & \$ 5,000 \\\text { Alimony (divorce finalized in 2019) } & 24,000 \\\text { Charitable contributions } & 2,000 \\\text { Casualty loss (after } \$ 100 \text { floor) } & 1,000 \\\text { Mortgage interest on personal residence } & 4,500 \\\text { Property taxes on personal residence } & 4,200 \\\text { Moving expenses } & 2,500 \\\text { Contribution to a traditional IRA } & 4,000 \\\text { Sales taxes (no state or local income tax is imposed) } & 1,300\end{array}$$ Calculate Austin's deductions for AGI.

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Definitions:

Direct Labor Hours

The total hours worked by employees directly involved in producing goods or services.

Assembling Department

A section within a manufacturing operation where various components are put together to form a finished product.

Activity-based Costing

A method of allocating overhead and indirect costs based on each product's or service's actual consumption of resources.

Cost Pools

A method used in cost accounting to group collected costs, which simplifies allocating costs to different products, services, or departments.