Taxpayers Need Not Include an Income Item in Gross Income

question 48

True/False

Taxpayers need not include an income item in gross income unless there is a specific tax provision requiring the taxpayer to include the income item in gross income.

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Definitions:

Standard Labor Rate

A predetermined cost per labor hour, used in budgeting and cost control for planning and evaluating labor expenses.

Actual Hours Incurred

The real number of hours worked or used in the completion of a task or production of a good, as opposed to the estimated hours.

Materials Price Variance

The difference between the actual cost of materials and the expected (standard) cost multiplied by the quantity of materials used.

Standard Costing System

A cost accounting system that uses standard costs for product costs and measures variances to actual costs for performance evaluation.