Burt and Lisa Are Married and Live in a Common

question 119

Multiple Choice

Burt and Lisa are married and live in a common law state.Burt wants to make gifts to their five children in 2012.What is the maximum amount of the annual exclusion they will be allowed for these gifts?

• A)$130,000.
• B)$65,000.
• C)$26,000.
• D)$13,000.
• E)None of the above.

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs (both fixed and variable) in the cost of a product.

Net Income

The total earnings of a company after subtracting all expenses, taxes, and costs, reflecting the actual profitability.

Absorption Costing

A method of accounting that incorporates both variable and fixed manufacturing expenses into the pricing of a product.

Variable Costing

A costing method in which only variable production costs are assigned to inventory and cost of goods sold, excluding fixed manufacturing overhead.