FRE272H1 Lecture : Lecture #2

Ray Ray made the following contributions this year

1) Determine the maximum amount of charitable deduction for eachof these contributions ignoring the AGI ceiling oncharitable contributions and assuming that the American HeartAssociation plans to sell the antique painting to fund itsoperations. Ray Ray has owned the painting and Coca-Cola stocksince 1990

Cash Contributions____

Propery donations______

Antiquities, Ltd., produces antique-looking books. Managementhas just received a request for a special order for 2,000 books andmust decide whether to accept it. Venus Company, the purchaser, isoffering to pay $22.00 per book, plus $3.00 per book for shippingcosts. The variable production costs per book include $9.20 fordirect materials, $4.00 for direct labor, and $3.80 for variableoverhead. The current year’s production is 22,000 books, andmaximum capacity is 25,000 books. Fixed costs, including overhead,advertising, and selling and administrative costs, total $80,000.The usual selling price is $25.00 per book. Shipping costs, whichare additional, average $3.00 per book. Determine wheterAntiquities should accept the special order.