Fleming Corporation, a U Fleming Paid $50,000 Income Tax to CountryA

question 35

Multiple Choice

Fleming Corporation, a U.S. multinational, has pretax U.S. source income and foreign source income as follows. $\begin{array}{lr}\text { U.S. source income } & \$ 1,000,000 \\\text { Foreign source income-Country A } & 500,000 \\\text { Total } & \$ 1,500,000\end{array}$ Fleming paid $50,000 income tax to CountryA. If Fleming takes the foreign tax credit, compute its worldwide tax burden as a percentage of its pretax income.

• A) 34%
• B) 35%
• C) 44%
• D) 45%

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Definitions:

Selling Price

The amount of money charged to the customer for a product or service, potentially including costs of production, distribution, and a markup for profit.

Contribution Margin

The gap between sales income and variable expenses, showing the amount that goes towards covering fixed expenses and creating earnings.

Manufacturing Overhead Cost

refers to the indirect factory-related costs that are incurred when a product is manufactured, such as utilities, maintenance, and factory equipment depreciation.

Units Produced

The total number of complete units a company produces within a given period.