Ralph and Josee Have Adjusted Gross Income of $53,000

question 34

Multiple Choice

Ralph and Josee have adjusted gross income of $53,000.They have itemized deductions of $18,000 and incurred $2,000 in college expenses for their daughter who is a freshman at a local community college.They file jointly and have three exemptions at $4,000 each.Compute their tax liability for the current year.

• A) $227
• B) $1,170
• C) $255
• D) $2,780

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Definitions:

Predetermined Overhead Rate

A rate calculated by dividing the estimated total manufacturing overhead cost by the estimated job base for a specific period, used to allocate overhead costs to products.

Commercial Refrigerators

Refrigeration equipment designed specifically for commercial use to store perishable goods under controlled temperatures.

Labor-Hour

A measure of output or work done in terms of the time spent by an employee working, commonly used in calculating wages or production costs.

Overhead Variances

Differences between the actual overhead costs incurred and the overhead costs that were budgeted or expected.