Three Years Ago, Suzanne Bought a New Personal Automobile for $26,900

question 29

Multiple Choice

Three years ago, Suzanne bought a new personal automobile for $26,900. This year, she sold it for $19,000. What is the amount and character of Suzanne's recognized loss?

• A) No loss recognized on the sale of a personal asset.
• B) $26,900 long-term capital loss.
• C) $7,900 ordinary loss.
• D) $7,900 long-term capital loss.

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Definitions:

Variable Cost

Expenses that vary with the level of production or sales volume, including costs such as raw materials and direct labor.

Production Increases

A rise in the amount of goods and services produced by a company, often achieved through enhanced efficiency or expanded capacity.

Total Variable Costs

The sum of all costs that vary with the level of production or service delivery, such as materials and labor.

Activity Level

A measure of the amount of work or output produced in a specific period, often used in cost accounting to allocate variable costs.