DPAD_comprehensive - • W-2 wages allocated to DPGR...

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Domestic production activities deduction Client facts: Speed Company is a U.S. manufacturer of carburetors. They have one plant in the U.S. and one in China. Included in the contract price is an embedded warranty cost. This cost represents 3-4% of the overall contract price Speed has three major customers; one in the U.S., one in the U.K. and one in Canada. Sales personnel are located in the U.S., the U.K. and Canada.
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Unformatted text preview: • W-2 wages allocated to DPGR totaled $4,500,000. • Average annual three-year gross receipts $10,250,000. Financial information: Total China Sales 14,000,000 4,000,000 Cost of goods sold 7,000,000 1,800,000 Selling, G&A expenses 4,000,000* * $100,000 directly allocable to U.S. production. Required : Compute Speed Company’s 2008 DPAD....
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