LO.2 Tern Corporation manufactures a motor scooter at a cost of $5,000 and sells it to Snipe

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LO.2 Tern Corporation manufactures a motor scooter at a cost of $5,000 and sells it to Snipe Corporation for $7,000. Snipe spends $2,000 marketing the scooter and sells it to the general public for $12,000. Presuming that the taxable income and W–2 wage limitations do not apply, what is the domestic production activities deduction (DPAD) if:

a. Tern Corporation and Snipe Corporation are not members of the same affiliated group?

b. Are members of the same affiliated group?

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