MrAnd MrsDarling Are in the Process of Adopting Two Children

question 13

Multiple Choice

Mr.and Mrs.Darling are in the process of adopting two children.Their adjusted gross income for 2011 is $135,000. During 2011,their adoption of a baby girl from Florida became finalized.They paid adoption expenses of $5,000 during 2010 and $7,000 during 2011.
The Darlings also paid $2,500 during 2010 and $4,000 during 2011 for the adoption of a boy from South Carolina.This adoption is not finalized until 2012.
On their 2011 tax return,how much may the Darlings take as an adoption credit?

• A)$7,500
• B)$13,360
• C)$14,500
• D)$20,500

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Definitions:

Direct Manufacturing Cost

The sum of all costs directly tied to the production process, including direct labor and raw materials.

Manufacturing Overhead

Costs incurred in the production process that are not directly associated with individual units, including indirect materials, labor, and utilities, vital for operational continuity.

Gross Margin

A company's revenue minus its cost of goods sold, indicating how efficiently a company uses labor and supplies in production.

Differential Costs

The change in total costs that results from choosing one alternative over another in decision-making processes.