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2 W Campus Requirement 1. Calculate the after tax operating income per unit earned by each division under the long des maladie Included in the computation of the cost-based transfer prices) Begin with calculating the after-tax operating income for the China division under each method Then complete the table United Method A Method B Method China division Division revenge per unit Cost per unit Division variable cost per unit Division fixed cost per unit Total division cost per unit Enter any number in the edit fields and then click Check Ans 2. Which transfer pricing method wil maximize Definition t-lax operating cost-based trang operating income Method a. China division-manufactures memory devices and keyboards b. South Korea division - assembles desktop computers using locally manufactured parts, along with memory devices and keyboards from the China Division c. U.S. division-packages and distributes desktop computers Print Done is located in a dill b) 200% the cosas the the after tax op cost and 50% of v. arating income per un Sed transfer prices) The costs for the work done in each division for a single desktop computer areas foto 19 China division Variable cost = 700 yuan Fixed cost = 1,400 yuan South Korea division Variable cost = 300,000 won Fixed cost = 450,000 won U.S. division Variable cost = $100 Fixed cost = $190 al formign cuando ang income for the Chi Method A Chinese income tax rate on the China division's operating income 40% South Korean income tax rate on the South Korea division's operating income 24% U.S income tax rate on the U.S. division's operating income: 40% Each desktop computer is sold to retail outlets in the United States for $3,600. Assume that the current foreign exchange rates are as follows: 7 yuan = S1 US 1 500 won = SUS computer as a profit Requirements 1. Calculate the after-tax operating to come per unit camody eachelon under the following transfer pricing methods: (a) market price (b) 200% of full cost and of variable cost. (Income taxes are not included in the computation of the costbased transfer price 2 Which transfer pricing method(s) will maximize the atter ex operating income per Easy Keys Computer? the following transfer pricing methods: (a) market price. (b) 200% of full cost, and (c) 350% of variable cost scometas Then complete the table for South Korea and the United States (Convert all foreign currencies to US dollars) * Definition X om od a. China division - manufactures memory devices and keyboards b. South Korea division - assembles desktop computers using locally manufactured parts, along with memory devices and keyboards from the China Division c. U.S. division - packages and distributes desktop computers Print Done Es (Cick the icon to view the data.) 2. taxes aren Which trans Computer? Method A Method B Method C China division Division revenue per unit Cost per una Division variable cost per unit Division fred cost per unit Total division cost per unit Division operating income per unit Income tax at 40% Divonne income per un Enter any number in the edit Delds and then click Data Table X as in San Francisco ch is located in a dille South Korea division nit eamed by 200% of full the cool e the after Variable cost = 300,000 won Fixed cost = 450,000 won Variable cost = $100 Fixed cost = $190 U.S. division Method A - Chinese income tax rate on the China division's operating income: 40% South Korean income tax rate on the South Korea division's operating income: 24% U S. income tax rate on the US division's operating income: 40% Each desktop computer is sold to retail outlets in the United States for $3,600. Assume that the current foreign exchange rates are as follows. 7 yuan = $1 U.S. 1,500 won=S1 U.S. Both the China and the South Korea divisions sell part of their production under a private label The China division sells the comparable memory/keyboard package used in each Easy Keys desktop computer to a Chinese manufacturer for 3,500 yuan. The South Korea division sells the comparable desktop computer to a South Korean distributor for 1.650,000 won nd then click Check Ans Print Done ons na profil conter Information on each division follow (Click the icon to view the data) Calculate the ansfer pricing method not included in the Which wong maibs) wimu Computer 2 MethodA Method B Method China division Division revenue per unit Cost per una Division variable cost per unit Division fbxed cost per unit Total division cost per unit Division operating income per unit Income tax at 40% Division net income per unit Enter any number in the edit fields and then click Check Answer China division South Korea division Variable cost = 700 yuan Fixed cost = 1.400 yuan Variable cost = 300,000 won Fixed cost = 450,000 won Variable cost = $100 Fixed cost = $190 U.S. division Chinese income tax rate on the China division's operating income: 40% South Korean income tax rate on the South Korea division's operating income: 24% U.S. income tax rate on the U.S. division's operating income 40% . Each desktop computer is sold to retail outlets in the United States for $3,600. Assume that the current foreign exchange rates are as follows: 7 yuan = $1 U.S. 1,500 won = $1 U.S. Both the China and the South Korea divisions sell part of their production under a private us Print Done unit Each desktop computer is sold to retail outlets in the United States for $3,600 Assu that the current foreign exchange rates are as follows: 7 yuan = $1 U.S. 1,500 won = $1 U.S. Both the China and the South Korea divisions sell part of their production under a private label. The China division sells the comparable memory/keyboard package used in each Easy Keys desktop computer to a Chinese manufacturer for 3,500 yuan. The South Korea division sells the comparable desktop computer to a South Korean distributor for 1,650,000 won fields and then click Check Ans Print Done Question Help Requirements A 1. Calculate the after-tax operating income per unit earned by each division under the following transfer pricing methods: (a) market price, (b) 200% of full cost, and (c) 350% of variable cost. (Income taxes are not included in the computation of the cost-based transfer prices.) 2. Which transfer-pricing method(s) will maximize the after-tax operating income per unit of Easy Keys Computer? Easy Keys Computer, Inc., with headquarters in San Francisco manufactures and sel a Requirements duoktop computer Easy Kuys has led to each of which is located in a different 1. Calculate the attor-tax operating income per uniteamed by each don under the country. Each division is run as a prolonter Information on each division follow following transfer pricing methods (a)market prico. (b) 200% of hill cost and (c) Click the icon to view the data) 350% of variable cost (income taxes are not included in the computation of the cool based transfer prices) > Which transfer pricing methods wil marmiro the attor tax operating income per unit of Easy Keys Computer? Requirement 1. Cakulate the ther-tax operating income per uniteamed by each dynion under the following transfer pricing methods ) market price, (h) 200% of tot cost and (c) 350% of variable col (Income taxes are not inchided in the computation of the cost-based transfer prices Begin with lowlating the after-tax operating inconia for the China division under each method. Then complete the ble for South Korea and the United States (Convert foreign currencies 10 US dollars Method Method B Method China division Division revenue per unit Cost per unit Divalon variable cost per unit Definition SEL S a. China division-manufactures memory devices and keyboards b. South Korea division - assembles desktop computers using locally manufactured parts, along with memory devices and keyboards from the China Division c. U.S. division-packages and distributes desktop computers Print Done 1 Data table Duter, Inc., with headq er. Easy Keys has thre vision is run as a profit on to view the data.) The costs for the work done in each division for a single desktop computer are as follows: init earne price. (b included 1,400 yuan te the afte Calculate the after-tax able cost (Income taxe ket price China division Variable cost = 700 yuan Fixed costs South Korea division Variable cost = 300,000 won Fixed cost = 450,000 won U.S. division Variable cost = $100 Fixed cost = $190 Chinese income tax rate on the China division's operating income. 40% South Korean income tax rate on the South Korea division's operating income 24% US income tax rate on the US division's operating income. 40% lating the after-tax ope es to US dollars.) he United te per unit Each desktop computer is sold to retail outlets in the United States for $3,600. Assume that the current foreign exchange rates are as follows ble cost per unit 7 yuan = $10.5 Ser in the edit fields an Print Done che O U.S. division Variable cost = $100 Fixed cost $190 ke the Chinese income tax rate on the China division's operating income: 40% South Korean income tax rate on the South Korea division's operating income 24% U.S. income tax rate on the U.S. division's operating income. 40% kelp he Ur Each desktop computer is sold to retail outlets in the United States for $3,600. Assume that the current foreign exchange rates are as follows 7 yuan = $1 US 1,500 won = $1 U.S Both the China and the South Korea divisions sell part of their production under a private label. The China division sells the comparable memory/keyboard package used in each Easy Keys desktop computer to a Chinese manufacturer for 3.500 yuan The South Korea division sells the comparable desktop computer to a South Korean distributor for 1.650.000 won (Click the icon to view the data.) following transfer pricing mel 350% of variable cost. (Incon cost-based transfer prices.) Which transfer pricing metho unit of Easy Keys Computer? 2. TOT DIVISION Division revenue per unit Cost per unit Division variable cost per unit Division fixed cost per unit Total division cost per unit Division operating income per unit Income tax at 40% Division net income per unit Enter any number in the edit fields and then click Check

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