Maren received 12 NQOs (each option gives her the right to purchase 13 shares of stock for $10 per share) at the time she starte
d working when the stock price was $8 per share. When the share price was $17 per share, she exercised all of her options. Eighteen months later she sold all of the shares for $22 per share. How much gain will Maren recognize on the sale and how much tax will she pay assuming her marginal tax rate is 35 percent and long-term capital gains rate is 15 percent??
A. $1,872 gain and $281 tax.
B. $0 gain and $0 tax
C. $780gain and $273 tax
D. $780 gain and $117 tax
A. $1,872 gain and $281 tax.
B. $0 gain and $0 tax
C. $780gain and $273 tax
D. $780 gain and $117 tax
1 answer:
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Answer:
Activity Rates are:
1 = $14.55 per activity
2 = $8.69 per activity
3 = $57.47 per activity
Cost per product
A = $32.2525
B= $34.7333
Explanation:
As for the provided information,
There are three activities.
Activity 1 = $17,460 and total = 1,200
Rate of activity = $17,460/1,200 = $14.55 per activity
Activity 2 = $19,987 and total activity = 2,300
Rate of activity = $19,987/2,300 = $8.69 per activity
Activity 3 = $29,884 and total activity = 520
Rate of activity = $29,884/520 = $57.47 per activity.
Costs of each product
Product A = ($14.55 600) + ($8.69
1,700) + ($57.47
40)
= $8,730 + $14,773 + $2,298
= $25,801
Cost per unit = $25,802/800 = $32.2525
Product B = ($14.55 600) + ($8.69
600) + ($57.47
120)
= $8,730 + $5,214 + $6,896
= $20,840
Cost per unit = $20,840/600 = $34.73