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Apple sets transfer prices between divisions: Manufacturing division cost $50/unit, Retail division external market price $70/unit, transfer price $60/unit. Requirements: Calculate the impact of transfer

  1. Apple sets transfer prices between divisions: Manufacturing division cost $50/unit, Retail division external market price $70/unit, transfer price $60/unit.
    • Requirements:
      • Calculate the impact of transfer pricing on divisional profits.
      • Analyze the tax implications of transfer pricing policies.
      • Recommend a transfer pricing strategy that aligns with tax regulations and divisional profitability goals.
      • Discuss the ethical considerations in setting transfer prices.

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