Question
Crain Company has a manufacturing subsidiary in Singapore that produces high-end exercise equipment for U.S. consumers. The manufacturing subsidiary has total manufacturing costs of $1,540,000,
Crain Company has a manufacturing subsidiary in Singapore that produces high-end exercise equipment for U.S. consumers. The manufacturing subsidiary has total manufacturing costs of $1,540,000, plus general and administrative expenses of $354,000. The manufacturing unit sells the equipment for $2,540,000 to the U.S. marketing subsidiary, which sells it to the final consumer for an aggregate of $3,540,000. The sales subsidiary has total marketing, general, and administrative costs of $204,000. Assume that Singapore has a corporate tax rate of 33% and that the U.S. tax rate is 46%. Assume that no tax treaties or other special tax treatments apply.
Required:
What is the effect on Crain Companys total corporate-level taxes if the manufacturing subsidiary raises its price to the sales subsidiary by 20%? (Do not round intermediate calculations. Input all amounts as positive values.)
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The ones filled in are correct, PLEASE HELP ME WITH THE REST ASAP, THANK YOU!
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