Use the Table for the Question(s)below

question 59

Multiple Choice

Use the table for the question(s) below.
Consider the following historical top federal tax rates in the United States:
Personal Tax Rates
-In 2000,the effective tax rate for debt holders was closest to:

• A)61%.
• B)52%.
• C)64%.
• D)40%.

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Definitions:

Variable Costing

An accounting methodology that assigns only variable costs to inventory, treating fixed costs as expenses of the period.

Operating Income

Refers to the profit realized from a business's core operating activities, excluding deductions of interest and taxes.

Absorption Costing

Absorption costing is an accounting method that includes all manufacturing costs (both variable and fixed) in the cost of a product.

Variable Costing

Variable costing is an accounting method that only considers variable costs (costs that change with production levels) in the calculation of product or service costs, excluding fixed costs.