Arin and Bo Have $74,000 Total Taxable Income,which Includes $13,500

question 40

Multiple Choice

Arin and Bo have $74,000 total taxable income,which includes $13,500 of taxable income from France.They paid $1,600 in foreign income taxes,and their U.S.tax liability is $17,610.Arin and Bo's foreign tax credit is:

• A)$0.
• B)$600.
• C)$1,600.
• D)$3,213.

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Definitions:

Break-even

The point at which total cost and total revenue are equal, resulting in no net loss or gain.

Variable Costs

Expenses that change in proportion to the level of production or business activity.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales activities, such as rent, salaries, and insurance.

Contribution Margin

The sales price minus the variable costs of a product, indicating how much selling one more unit adds to profit.