Crouch LLC Placed in Service on May 19,2017 Machinery and Equipment

question 77

Multiple Choice

Crouch LLC placed in service on May 19,2017 machinery and equipment (7-year property) with a basis of $2,200,000.Assume that Crouch has sufficient income to avoid any limitations.Calculate the maximum depreciation expense including §179 expensing (but ignoring bonus expensing) .(Use MACRS Table 1)

• A) $314,380.
• B) $340,000.
• C) $605,794.
• D) $742,930.
• E) None of the choices are correct.

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Definitions:

Activity Level

The volume of work or the number of transactions handled by a business or department, which can drive the allocation of costs based on activity-based costing principles.

Fixed Costs

Overheads that stay the same no matter the quantity of goods produced or sold, like rent, salaries, and insurance.

Activity Level

A measure of the volume of work or production capability, often used in cost accounting to determine appropriate cost allocations.

Unit Variable Cost

The cost directly associated with producing each unit of output, varying with the level of production or sales volume.