Which of the Following Is True of the Alternative Minimum

question 21

Multiple Choice

Which of the following is true of the alternative minimum tax?

• A)The alternative minimum tax is designed to ensure that high income taxpayers do not pay excessive amounts of income tax.
• B)For 2014, the alternative minimum tax rates are 20 percent and 30 percent, depending on the taxpayer's income.
• C)The amount of a taxpayer's state income tax may not be deducted for the purpose of computing the alternative minimum tax.
• D)All tax-exempt interest is a tax preference item for the alternative minimum tax.
• E)None of the above are true.

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Definitions:

Joint Costs

The costs incurred in the process of producing two or more products simultaneously from the same input or process.

Weighted Average Method

A method for calculating the cost of goods sold and the ending inventory value, which utilizes the average cost of all available sale items.

Joint Costs

Costs incurred when producing multiple products simultaneously, which cannot be easily attributed to a single product.

Weight Factor

A factor assigned to each product in a joint manufacturing process representing its importance in comparison to the other products.