In 2014, Rose, Inc., has QPAI of $4 million and taxable income of $3 million. Rose pays independent contractors $500,000. Rose's W-2 wages are $600,000, but only $400,000 of the wages are paid to employees engaged in qualified domestic production activities.
a. Calculate the DPAD for Rose, Inc., for 2014.
b. What suggestions could you make to enable Rose to increase its DPAD?