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accounting please assist urgently Question 4 Industrial Diamonds, Inc., based in Los Angeles has two divisions: South African mining division, which mines a rich diamond
accounting
please assist urgently
Question 4 Industrial Diamonds, Inc., based in Los Angeles has two divisions: South African mining division, which mines a rich diamond vein in South Africa US processing division, which polishes raw diamonds for use in industrial cutting tools The processing division's yield is 50%: It takes two kilograms of raw diamonds to produce 1 kilogra of top quality polished industrial diamonds. Although all of the mining division's output of 8 04 kilograms of raw materials is sent for processing in the United States, there is also an active markt for raw diamonds in South Africa. The foreign exchange rate is 15 ZAR - $1 US. R600 R1 200 R3 600 25% The following information is known about the two divisions: South African Mining Division Variable cost per kg of raw diamonds Fixed cost per kg of raw diamonds Market price per kg of raw diamonds Tax rate US Processing Division Variable cost per kg of raw diamonds Fixed cost per kg of raw diamonds Market price per kg of raw diamonds Tax rate $220 $850 $3 500 40% Calculate the after-tax operating income, in S, for each division under the following transfer pricing methods: 250% of full cost Market price bStep by Step Solution
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