Reggie and Ramona Are Married and Have Two Children in College

question 69

Multiple Choice

Reggie and Ramona are married and have two children in college. Jason is a sophomore, and Justine is a senior. They pay $2,500 in tuition and fees for Jason, $900 for his books and $3,000 for his room and board. Justine's tuition and fees are $5,000, her book expense is $800, and her room and board expenses are $2,600. Their adjusted gross income is $170,000. What amount can they claim as a tax credit for the higher education expenses she pays?

• A) $ -0-
• B) $2,425
• C) $3,125
• D) $3,638
• E) $4,850

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Definitions:

Unit Cost

The expenditure associated with creating, storing, and selling a single unit of a particular product or service by a business.

Supply Curve

A graphical representation showing the relationship between the price of a good or service and the quantity of that good or service that suppliers are willing to offer for sale at that price.

Marginal Cost Curve

A graphical representation that shows how the cost of producing one more unit of a good varies with the quantity of the good produced.

Average Variable Cost

Average variable cost is the total variable costs divided by the quantity of output produced, showing the variable cost per unit of output.