Figure 20-9

Miggs Manufacturing has one plant located in Belgium and another plant located in the United States. The Belgium plant manufactures a component used in a finished product manufactured at the U.S. plant. Currently, the Belgium plant is operating at 70 per cent capacity. In Belgium, the income tax rate is 42 per cent; in the United States, the corporate income tax rate is 35 per cent.

The market price of the component is 200 and the Belgium plant's costs to manufacture the component are as follows:

Direct materials 20 Direct labour 40 Variable overhead 10 Fixed overhead 30

Refer to Figure 20-9. What is the minimum transfer price that the Belgium division would be willing to accept?