Each of the Numbered Items Below Is Accorded Only One

question 105

Multiple Choice

Each of the numbered items below is accorded only one of the following lettered treatments. Use the existing law as it applies to the current year, match the best answer to the statements below.
-Laura's employer pays the first $5,000 in childcare benefits under their childcare assistance plan.

• A)Fully excluded from gross income.
• B)Fully included in gross income.
• C)Partially excluded from gross income.

---

Definitions:

Weighted-Average Method

A method of inventory costing that assigns a weighted average cost to each item in inventory, used in both perpetual and periodic inventory systems.

Process Costing System

A costing methodology used in manufacturing where costs are assigned to batches of products rather than individual items, suitable for homogeneous products.

Equivalent Units

The product of the number of partially completed units and their percentage of completion with respect to a particular cost. Equivalent units are the number of complete whole units that could be obtained from the materials and effort contained in partially completed units.

Conversion Costs

The combined costs of direct labor and manufacturing overheads, representing the costs to convert materials into finished goods.