Ms. Xie, who is in the 37 percent tax bracket, is the sole shareholder and president of Xenon. The corporations financial records show the following:

Gross income from sales of goods	$ 1,602,000
Operating expenses	(934,000)
Salary paid to Ms. Xie	(304,000)
Dividend distributions	(204,000)

Required:

1. Compute the combined tax cost for Xenon and Ms. Xie. (Ignore payroll tax.)
2. How would your computation change if Ms. Xies salary was $508,000 and Xenon paid no dividends?