Chinglish Dirk (A). Chinglish Dirk Company (Hong Kong) exports razor blades to its wholly owned parent company. Torrington Edge (Great Britain). Hong Kong tax rates are 17% and British tax rates are 34%. The markup was 15% and the sales volume was 2,000 units. Chinglish calculates its profit per container as follows (all values in British pounds): - Corporate management of Torrington Edge is considering repositioning profits within the multinational company. What happens to the profits of Chinglish Dirk and Torrington Edge, and the consolidated results of both, If the markup at Chinglish was increased to 20% and the markup at Torrington was reduced to 10%? What is the impact of this repositioning on consolidated after-tax profit and total tax payments? Calculate the profits of Chinglish Dirk and Torrington Edge, and the consolidated results of both, if the markup at Chinglish was increased to 20% and the markup at Torrington was reduced to 10% in the following table: (Round to the nearest British pound.) Constructing Transfer Chinglish Dirk Torrington Edge Consolidated Data table (Sales) Price per Unit (British pounds) (British pounds) ) (British pounds) Direct costs 12,000 Overhead 3,800 Constructing Transfer 1,200 Chinglish Dirk Consolidated Torrington Edge Total costs f 15,800 (Sales) Price per Unit (British pounds) (British pounds) (British pounds) Desired markup Direct costs f 12,000 18,170 Transfer price (sales price) E Overhead 3,800 1,200 Total costs f 15,800 19,370 Income Statement Desired markup 2,370 2,906 Sales price E E Transfer price (sales price) ) 18,170 22,276 Less total costs Taxable income f Income Statement Less taxes Sales price 36,340,000 44,552,000 Profit, after-tax Less total costs ( (31,600,000) (38,740,000) Taxable income f 4,740,000 5,812,000 Less taxes (805,800) (1,976,080) 2.781.880 Profit, after-tax 3,934,200 3,835,920 7,770.120