A Controlled Foreign Corporation (CFC)is Incorporated in Country B,and Is

question 41

Multiple Choice

A controlled foreign corporation (CFC) is incorporated in Country B,and is 100% owned by American Manufacturing Corporation.It purchases raw materials from its U.S.parent corporation,manufactures widgets,and sells 70% of the widgets to unrelated purchasers in Country A and 30% to unrelated purchasers in Country B.All widgets will be used in the countries in which they are purchased.The sales produce $100,000 of taxable income.The foreign-base company sales income reportable by American Manufacturing Corporation under the Subpart F rules is

• A)$0.
• B)$30,000.
• C)$70,000.
• D)$100,000.

---

Definitions:

Long Run

A period in which all factors of production and costs are variable, allowing for all possible adjustments in production and operations.

Break-Even

The point at which total cost and total revenue are equal, meaning the business or project is not making a loss nor profit.

Peak Efficiency

Peak Efficiency is the optimal state of operation where resources and processes produce maximum output with minimum waste or inefficiency.

ATC Curve

The Average Total Cost curve graphically represents the total cost per unit of output produced, calculated by dividing the total cost by the quantity of output.