You Want to Minimize Your Current Tax Bill by Maximizing

question 21

Multiple Choice

You want to minimize your current tax bill by maximizing your contributions to your ________.

• A) taxable bond portfolio
• B) Roth retirement plan
• C) 401k or 403b plan
• D) taxable savings account

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Definitions:

Activity-Based Costing

An accounting method that assigns overhead and indirect costs to specific activities, providing more accurate product costing.

Overhead Cost

Expenses related to the operation of a business that cannot be directly traced to a specific product or service, such as rent, utilities, and administrative costs.

First Stage Allocations

The initial process of distributing overhead costs to various cost pools or departments in activity-based costing.

Activity Rate

The cost driver rate in activity-based costing used to assign costs to cost objects, based on each cost object's usage or creation of costs.