Alpha Corporation Owns 100 Percent of Beta Company, and Beta

question 108

Multiple Choice

Alpha Corporation owns 100 percent of Beta Company, and Beta owns 80 percent of Gamma, Inc. all of which are domestic corporations. Information for the three companies for the year ending December 31, 2013 follows: What is Beta's accrual-based income for 2013?

• A) $200,000.
• B) $276,800.
• C) $280,000.
• D) $296,000.
• E) $300,000.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or volume of sales.

Fixed Costs

Expenses that do not change with the level of production or sales in the short term, such as rent, salaries, and insurance.

Break-even Point

The point at which total costs and total revenues are equal, resulting in no net loss or gain.

Property Taxes

Taxes paid by property owners to local governments based on the assessed value of their property.