Avoid Paying Unnecessary Tax Cost Accountingtaxat

Job-costing is an important aspect of Managerial Accounting. Managers use a job-costing system to determine whether to bid on a job, how much to bid on the job, and to ensure they have enough resources to complete the job. By breaking down costs into direct and indirect costs, managers can identify the resources needed and apply the costs to each specific job. Once the costs are identified by job, and by indirect or direct costs, managers can analyze the costs to determine if there are any inefficient areas in the process, if costs can be reduced, or what the profit will be from producing that product or offering the service.

For the discussion below, assume you are advising the financial manager of a company that produces customized products.

Next, address the following question in your initial post:

• How would job costing be used in a business that makes customized products?

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The IRS has issued guidance to aid in the determination of the proper handling of various types of income when preparing tax returns. This guidance can be found at the IRS (Links to an external site.)Links to an external site. website. The primary source of information is Publication 525, Taxable and Nontaxable Income. Because IRS agents who perform the initial reviews of returns may or may not note improperly categorized income, it is up to the taxpayer to avoid paying unnecessary tax. As a result, it is worthwhile to spend some time examining the information in this area.

For this discussion, review the list of topics in Publication 525, Taxable and Nontaxable Income (Links to an external site.)Links to an external site. [PDF, File Size 1.6 MB] and summarize a topic that you find to be of interest. Explain why this is an important item for taxpayers to understand. It is useful to think of this information in terms of how it can affect activities, such as investment decisions.