Michael Has a Very Successful Business as a Financial Consultant

question 111

Essay

Michael has a very successful business as a financial consultant.Michael attends the following seminars: $$\begin{array} { l r } \text { "Zen Your Way to Riches" } & \$ 800 \\\text { "Backyard Gardening" } & 50 \\\text { "Computer Marketing Tools" } & 200 \\\text { "Passing the Legal Bar Exam" } & 500 \\\text { "Beating the Market" } & 300\end{array}$$ How much can Michael deduct as business education expenses?

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Definitions:

ABC System

Activity-Based Costing; a method of assigning overhead and indirect costs to specific products or projects, based on their usage of activities.

Single-Base Allocation

A cost allocation method where overhead costs are distributed based on a single criterion or cost driver.

Cost Difference

The variance between the actual cost and the standard or expected cost of an item or activity.

ABC System

Activity-Based Costing System, a method of assigning overhead and indirect costs to specific products and services based on their consumption of resources.