Kathy Is 48 Years of Age and Self-Employed

question 36

Multiple Choice

Kathy is 48 years of age and self-employed. During 2014 she reported $100,000 of revenues and $40,000 of expenses relating to her self-employment activities. If Kathy has no other retirement accounts in her name, what is the maximum amount she can contribute to a simplified employee pension (SEP) IRA for 2014?

• A) $11,152
• B) $16,652
• C) $57,500
• D) $52,000

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Definitions:

Manufacturing Processes

A series of steps or operations used to transform raw materials into finished goods through physical, chemical, or mechanical measures.

Plantwide Factory Overhead Rate

A single overhead absorption rate used throughout an entire plant or factory to allocate indirect costs to products uniformly.

Budgeted Factory Overhead

An estimate of the total indirect manufacturing costs that will be incurred to support operations during a specified period.

Plantwide Allocation Base

A single cost driver used throughout an entire plant or facility to allocate overhead costs to different products or cost objects.