Dave Is the Regional Manager for a National Chain of Auto-Parts

question 6

Multiple Choice

Dave is the regional manager for a national chain of auto-parts stores and is based in Salt Lake City.When the company opens new stores in Boise, Dave is given the task of supervising their initial operation.For three months, he works weekdays in Boise and returns home on weekends.He spends $410 returning to Salt Lake City but would have spent $350 had he stayed in Boise for the weekend.As to the weekend trips, how much, if any, qualifies as a deduction?

• A)$0, since the trips are personal and not work related.
• B)$0, since Dave's tax home has changed from Salt Lake City to Boise.
• C)$60.
• D)$350.
• E)$410.

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Definitions:

Direct Labour

The work effort provided by employees who are directly involved in the production of goods or delivery of services.

Manufacturing Overhead Budget

A financial plan that estimates the expected indirect production costs, excluding direct materials and direct labor.

Activity Base

A measure or statistic that is used as the basis for allocating costs in activity-based costing.

Overapplied Factory Overhead

The condition where the allocated factory overhead costs exceed the actual factory overhead expenses.