4 Hong Kong tax rates are 19% and British tax ates are 31 he Chinglish Dirk B). Chinglish Dirk Company Hong Kong exports razor blades to its wholly owned parent company, Torrington Edge (Great Britain markup was 15% and the sales volume was 3,000 units. Chinglish calculates its profit per container as follows (all values in British pounds): 1 Corporate management of Torrington Edge wishes to reposition profit in Hong Kong. It is, however, facing two constraints. First, the final sales price in Great Britain must be 20,000 or lass to remain compatitive. Secondly, the British tax authorities-in working with Torrington Edge's cost accounting staff has established a maximum transfer price allowed (fram Hong Kong) of 17,800. Prove that the optimal combination of markups is a 25.0% markup at Chinglish and an 8.1% markup in Torrington Edge. What is the impact of this repositioning on consolidated after-tax profits and total tax payments h if he markup at Chinglish was increased to 25.0% and the markup at Torrington was reduced to 8.1% in the following Calculate the profits of Chinglish Dirk and Torrington Edge, and he consolidated results of table: (Round to the nearest cent.) Torrington Edge (British pounds) Constructing Transfer (Sales) Price per Unit Direct costs Overhead Total costs Desired markup Transfer price (sales price) Chinglish Dirk British pounds) Consolidated (British pounds) 10,000 E 4,000 14,000 1,000 E Income Statement Sales price Less total costs Taxable income Less taxes Profit, after-tax What is the impact of this repasitioning on consolidated after-tax profits and total tax payments? "With the optimal combination of a 25.0% markup in Hong Kong, resulting in a transfer price of 17.500, this allows Torrington Edge to impose an 8.1% markup on its sales and still stay under a sales price 20.000