Alex Briem Works Exclusively from Home as an Employed Salesperson

question 3

Multiple Choice

Alex Briem works exclusively from home as an employed salesperson for SET Co., and during the year Alex earned $21,000 from SET Co.Alex's office occupies 8% of the home's square footage.The following costs were incurred for the entire home during the year: property taxes $3,000, insurance $1,500, utilities $2,400, and mortgage interest $6,000.How much can Alex deduct for the year?

• A)$0
• B)$192
• C)$552
• D)$1,032

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Definitions:

Net Cash Inflows

The total amount of cash entering a company, typically during a specific period, after all cash outflows have been subtracted.

Operating Income

Earnings before interest and taxes, representing the profit gained from a firm's core business operations.

Cash Payback Period

The duration of time it takes for an investment to generate cash flows sufficient to recover the initial investment cost.

Factory Overhead

All manufacturing costs that are not directly associated with the cost of raw materials or direct labor, often including costs related to maintaining factory operations.