Kathy Works Full Time During the Day as an Economist

question 48

Multiple Choice

Kathy works full time during the day as an economist and faces a 90 percent marginal tax rate. If Kathy were to get an offer to work a second job in the evenings doing consulting work for a local business for $10,000 per year, how much of this additional income would she be able to keep as net pay after taxes?

• A) $1,000
• B) $4,000
• C) $6,000
• D) $10,000

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Definitions:

Actual Operations

The real-world activities carried out by a company, as opposed to planned or projected operations.

Materials Quantity Variance

The difference between the actual amount of materials used in production and the standard amount expected to be used, multiplied by the standard cost of the materials.

Standard Costs

Predetermined costs for products or services, used as a benchmark for performance evaluation.

Direct Labor-Hours

Overall working hours expended by personnel directly engaged in the production of goods or delivery of services.