Juanita,who Is Single,is in an Automobile Accident in 2014 and Her

question 95

Multiple Choice

Juanita,who is single,is in an automobile accident in 2014 and her car sustains $6,200 in damages.Because both drivers received tickets in the accident,Juanita does not expect to recover any of the loss from her insurance company.Juanita's 2014 AGI is $31,000,and she deducts a $3,000 loss on her 2014 tax return.Her other itemized deductions in 2014 exceed $12,000.In 2015,Juanita's insurance company reimburses her $2,800.Juanita's 2015 AGI is $28,000.As a result,Juanita must

• A)amend 2014 to show a $200 loss.
• B)do nothing and simply keep the $2,800.
• C)do nothing to the 2014 return but report $2,800 of income on her 2015 return.
• D)amend the 2014 return to show $0 loss and file her 2015 return to show a $200 loss.

Identify and calculate the total contribution margin under variable costing.

Differentiate between gross margin and contribution margin in costing approaches.

Understand the impact of cost structure decisions on financial performance and reporting.

Understand and distinguish between absorption costing and variable costing methods.

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Definitions:

Labour

The human effort, both physical and mental, used in the production process.

Competitive Bidding

A purchasing process in which suppliers submit bids to win the rights to fulfill a contract.

Bid Price

The price a buyer is willing to pay for a good, service, or financial instrument.

Incremental Costs

Costs that change with the level of output or activity, directly associated with a specific business decision.