ACCT 321 Second Semester-2020 Case Study-2 Adams Company imports wooden parts from its Canadian subsidiary that are used in the production of children's toys. Per unit, part AAll costs the Canadian subsidiary $2.00 to produce and S0.40 to ship to Adams Company. Adams Company uses part AAll to produce a toy buzzle that it sells to U.S. toy stores for $8.50 per unit. The following tax rates apply: Canadian income tax U.S. income tax U.S. import duty 33% 35% 10% of invoice price Required: 1. If part AALl is sold to Adams Company at a price of $3.50 per unit, determine the total amount of a) Net income. b) Taxes and duties paid to the U.S. and Canadian governments. 2. If part AAll is sold to Adams Company at a price of $3.80 per unit, determine the total amount of: a) Net income. b) Taxes and duties paid to the U.S. and Canadian governments. 3. Explain why the results obtained in parts (1) and (2) differ