Zanatech's Market for Its Remote Control Has Changed Significantly, and Zanatech

question 97

Multiple Choice

Zanatech's market for its remote control has changed significantly, and Zanatech has had to drop the selling price per unit from $45 to $38.There are some units in the work in process inventory that have costs of $30 per unit associated with them.Zanatech can sell these units in their current state for $22 each.It will cost Zanatech $11 per unit to rework these units so that they can be sold for $38 each.Which of the following is not a relevant value in this problem?

• A)$22
• B)$30
• C)$38
• D)$8

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Definitions:

Subchapter S Corporation

A form of corporation that meets specific Internal Revenue Code requirements, allowing it to be taxed as a pass-through entity, thereby avoiding double taxation on dividends.

Elects

The act of choosing or deciding on a particular option or course of action, often used in legal and financial contexts.

Terminate

To bring to an end; this can relate to employment, contracts, or services, among others.

Corporate Alternative Minimum Tax

A parallel tax system aimed at ensuring that corporations pay at least a minimum amount of tax, regardless of deductions or credits that would otherwise lower their tax bill.