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4 different questions Chris is conaidering purchasing a classlo Ford Mustang convertible as a second car, Chris currently rents an aportment, and separately rents a
4 different questions
Chris is conaidering purchasing a classlo Ford Mustang convertible as a second car, Chris currently rents an aportment, and separately rents a garage about a block away for $200 a month. She currently uses the garage for her car, and to store various "stuff," If she gets the Muntang. she'll rent a separate storage unit for $70 a month and moye the stutt there, so that sho can use the garage for both cars. In computing the monthly cost for owning the Mustang, What is the relevant cost to include from the above information? A US company has a subsidiary in italy and a subsidiary in Ireland. The ltalian subsidiary produces a product at a cost of 51,000 per unit. This unit in then sold to the lriah nubsidiary, which adds $1000 of cost to each unit. The unit is then shipped to the US. parent compary, which adds an additional $100 of cost to each unit. The unit is then sold to a US customer for $2.000. Assurne that the tax rato in italy is 30%, the tax rate in lroland is 15% and the tax rate in the US is 35%. Assume that the curnent transfer price associated with the sale to the Iriah subsidiary is $1,200, and that the transfor price to the US parent company is $1,600. A transfer pricing consultant telle the company that there aro a range of justifiable "arm's length" transfer prices that can be applied in this case. The consultant says the transfer to the Irish subsidiary could be anywhere between $1,100 and $1,300, while the transfer to the US could be anywhere betweon $1,500 and $1,700. What combination of transfer prices are optirnal for the firm (from a tax perspective)? $1,300 to treland and \$1,700 to US $1,100 to lifeland and $1,500 to the US $1,300 to ireland and $1,500 to US: $51,100 to friland and $1,700 to the US Chemking uses a atandard costing aystern in the manutacture of its single product. The 35,000 units of direct materials purchased and used cosi $105,000, and two units of direct materlals are required to produce one unit of final product. In November, the company produced 12,000 units of product. The fiexible budget for materials was $60,000, and the unfavorable static budget variance was $35,000. The number of outputs planned for in Chemking's static budget was 14,000 unith. 11.667 units: 12.000 units 9,600 unita. A company is considering outsourcing the production of a component part. The current proctuction coots por unit are. If one third of the fixed overhead cost can be avoided by buying the part instead of making it in-housie, what is the relevant doilar cost of producing the part internally (rounded to the nearest cent) Step by Step Solution
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