A Controlled Foreign Corporation (CFC) Is

question 80

Multiple Choice

A controlled foreign corporation (CFC) is

• A)a foreign corporation established as an affiliate of a U.S. corporation for the purpose of "buying" from the U.S. corporation property for resale and use abroad.
• B)a foreign subsidiary that has more than 50 percent of its voting equity owned by U.S. shareholders.
• C)a separate domestic U.S. corporation actively engaged in business in a U.S. possession (Puerto Rico and the U.S. Virgin Islands).
• D)one that has no "overall limitation" as regards to its foreign tax credits.

---

Definitions:

Predetermined Overhead Rate

A rate calculated by dividing the estimated total manufacturing overhead cost by the estimated job base for a specific period, used to allocate overhead costs to products.

Commercial Refrigerators

Refrigeration equipment designed specifically for commercial use to store perishable goods under controlled temperatures.

Labor-Hour

A measure of output or work done in terms of the time spent by an employee working, commonly used in calculating wages or production costs.

Overhead Variances

Differences between the actual overhead costs incurred and the overhead costs that were budgeted or expected.