A Company Had Taxable Income of $12 Million in Fiscal

question 39

Multiple Choice

A company had taxable income of $12 million in fiscal 2019 and paid taxes of 4.8 million; the company incurred a loss of $7 million in fiscal 2020 when the tax rate is 50%. How much refund is the company entitled to?

• A)Nil
• B)$2.8 million
• C)$3.5 million
• D)$4.8 million

---

Definitions:

Capacity

The maximum output a system can produce over a given period of time. It's crucial for planning and efficiency improvement.

Machine-Hours

A measure of production time or capacity based on the number of hours machines are in operation.

Unused Capacity

The available production or service capability that is not being utilized by a business.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to allocate manufacturing overhead costs to individual jobs or products based on a certain activity base, such as machine hours or labor hours.