Seacross Group has two subsidiaries, UKD in the UK and GD in Germany.

UKD makes and sells Product S99. The variable cost of manufacture in the UK is $£ 200$ per unit and annual fixed costs are $£ 210,000$. Product S99 sells for $£ 500$ per unit in the UK market and annual demand is 800 units.

GD in Germany buys 400 units of S99 from UKD each year, adapts them for the German market, and sells them for the equivalent of $£ 700$ per unit. The variable costs of adapting the product and selling it in Germany are $£ 50$ per unit. The cost of shipping the 400 units to Germany is $£ 6,000$ and these are paid by GD. Fixed costs in GD are $£ 24,000$ each year.

The rate of taxation on company profits is $30 \%$ in the UK and $50 \%$ in Germany.

Required:

What would be the annual after-tax profits of the group if the transfer price for $\mathrm{S} 99$ is:

(a) its UK market price, $£ 500$

(b) its variable cost of manufacture, $£ 200$ ?