Mike and Mandy Are Considering Contributing $5,000 to Their Favorite

question 79

Multiple Choice

Mike and Mandy are considering contributing $5,000 to their favorite tax-deductible charity.This contribution will bring their total itemized deductions to $20,000.Assuming they are in the 28% marginal tax bracket,how much will they save in taxes by contributing this $5,000 to charity? (Hint: Consider the amount of the standard deduction.)

• A)$0
• B)$784
• C)$1,400
• D)$2,000
• E)$5,000

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Definitions:

Cost Formula

An equation used to calculate the total cost of production that combines both fixed costs and variable costs.

Production Variation

Fluctuations in the quantity of goods produced, often due to changes in demand or production capacity.

Variable Operating Expenses

Operating costs that vary in proportion to the level of business activity or output, such as sales commissions and utility bills.

Comparative Income Statement

A financial statement that compares the income statements of two or more periods to identify changes in revenues, expenses, and net income.