Homework: Chapter 15 Homework Week 12 Save Score: 0 of 1 pt 6 of 7 (5 complete) HW Score: 56.55%, 3.96 of 7 pts X Problem 15-6 (algorithmic) Question Help Chinglish Dirk (B). Chinglish Dirk Company (Hong Kong) exports razor blades to its wholly owned parent company, Torrington Edge (Great Britain). Hong Kong tax rates are 19% and British tax rates are 33%. The markup was 15% and the sales volume was 2,500 units. Chinglish calculates its profit per container as follows (all values in British pounds): Corporate management of Torrington Edge wishes to reposition profit in Hong Kong. It is, however, facing two constraints. First, the final sales price in Great Britain must be 20,000 or less to remain competitive. Secondly, the British tax authorities in working with Torrington Edge's cost accounting staffhas established a maximum transfer price allowed (from Hong Kong) of 17,800. Prove that the optimal combination of markups is a 25.0% markup at Chinglish and an 8.1% markup in Torrington Edge. What is the impact of this repositioning on consolidated after-tax profits 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 25.0% and the markup at Torrington was reduced to 8.1% in the following table: (Round to the nearest cent.) Constructing Transfer i Data Table Chinglish Dirk (British pounds) 10,000 Torrington Edge (British pounds) Consolidated (British pounds) (Sales) Price per Unit 4,000 Chinglish Dirk (British pounds Constructing Transfer (Sales) Price per Unit Direct costs Torrington Edge (British pounds Consolidated (British pounds) Direct costs Overhead Total costs Desired markup Transfer price (sales price) 14,000 10,000 16,100 4,000 1,000 | 17,100 Overhead Total costs Desired markup Transfer price (sales price) 14,000 2,100 16,100 2,565 | 19,665 Income Statement Sales price Less total costs Taxable income Income Statement Sales price Less taxes 49,162,500 (42,750,000) Drnfit nofter tav Less total costs 40,250,000 (35,000,000) 5,250,000 (997,500) 4,252,500 Taxable income Less taxes Enter any number in the edit fields and then click Check Answer. 6,412,500 (2,116,125) 4,296,375 3,113,625 8,548,875 1 part Profit, after-tax remaining