1. The effective tax rate on dividend income is lower than interest income because of the dividend tax credit (DTC). Canadians are allowed to claim the DTC because the government wants to reduce the effects of double taxation.

True or False

2. Required production during a planning period will depend on the:

Multiple Choice

• desired level of ending inventory.

• cost of beginning inventory of products.

• credit sales during the period.

• desired level of beginning inventory.