Daisy,Inc,has Taxable Income of $850,000 During 2013,its First Year of Operations.Daisy

question 18

Essay

Daisy,Inc.,has taxable income of $850,000 during 2013,its first year of operations.Daisy distributes dividends of $200,000 to its 10 shareholders (i.e.,$20,000 each).Daisy earmarks $361,000 of its earnings for potential future expansion into other cities.

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Definitions:

Contribution Margin

The difference between the sales revenue of a company and its variable costs, indicating how much contributes to covering its fixed costs and generating profit.

Sales Volume

The total quantity of sales or units sold within a particular time frame.

Break-Even Point

The point at which total costs equal total revenues, meaning the business is not making a profit or a loss.

Direct Material

Raw materials that can be physically and directly associated with the finished product during the manufacturing process.