Danny Owns an Electronics Outlet in Dallas

question 3

Short Answer

Danny owns an electronics outlet in Dallas. This year he paid $600 to register for a four-day course in management in Chicago. Danny paid $800 in airfare and $1,000 for five nights lodging. After the course, Danny spent the last day sightseeing. During the trip, Danny also paid $140 a day for meals, and $80 a day for a rental car. What amount of these travel-related expenditures may Danny deduct as business expenses?

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Definitions:

Marginal Cost

The escalation in total expenses incurred from creating an additional unit of a product or service.

Excess Capacity

The situation where a firm has resources that are not being fully utilized, often leading to inefficiency and increased costs.

Monopolistic Competitor

A market structure where many firms sell products that are similar but not identical, allowing them some power to set prices due to product differentiation.

Advertising

The activity or profession of producing advertisements for commercial products or services.