Red Company, a U.S. corporation based in Mississippi, manufactures and sells a product which includes some components made in Mexico. None of Red's income from sales constitute DPGR.

Question

Quizplus · Accepted Answer

In order for the product to qualify as DPGR, at least 50% of the direct labor and direct materials costs must be attributable to activities within the U.S. Since some components are made in Mexico, it is unlikely that Red Company's product meets this requirement and therefore may not qualify as DPGR.