Solve the Problem $15 \%$ Marginal Rate Affects Income Starting At $\$ 8925$

question 36

Multiple Choice

Solve the problem. Refer to the table if necessary. 2013 Marginal Tax Rates, Standard Deductlons, and Exemptlons**


- Each higher marginal rate begins where the prior one leaves off. For example, for a single person, the $15 \%$ marginal rate affects income starting at $\$ 8925$ , which is where the $10 \%$ rate leaves off, and continuing up to \$36,250.
" This table ignores the effects of (i) exemption and deduction phase-outs that apply to high-income taxpayers and (ii) the alternative minimum tax (AMT) that affects many middle- and high-income taxpayers.
-Kyle is single and earned wages of $34,036. He received $362 in interest from a savings account. He contributed $549 to a tax-deferred retirement plan. He had $405 in itemized deductions from
Charitable contributions. Calculate his adjusted gross income.

• A)$34,947
• B)$34,542
• C)$33,849
• D)$33,444

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Definitions:

Overhead Absorption Rate

The rate at which indirect costs are allocated to produced goods or services.

ABC System

Activity-Based Costing; a method of assigning overhead and indirect costs to specific products or projects, based on their usage of activities.

Single-Base Allocation

A cost allocation method where overhead costs are distributed based on a single criterion or cost driver.

Cost Difference

The variance between the actual cost and the standard or expected cost of an item or activity.