Homework: Chapter 22 Homework Score: 0 of 1 pt E22-20 (similar to) Save 3 of 3 (D complete) HW Score: 0%, 0 of 3 pts Question Help User Able Computer, Inc., with headquarters in San Francisco, manufactures and sells a desktop computer. User Able Requirements has three divisions, each of which is located in a different country. Each division is run as a profit center. Information on Calculate the after-tax operating income per unit eamed by each division under the following transfer-pricing each division follows: methods: (a) market price, (b) 200% of full cost, and (c) 300% of variable cost. (Income taxes are not included in the computation of the cost-based transfer prices.) Which transfer-pricing method(s) will maximize the after-tax operating income per unit of User Able Computer? (Click to view the data.) 2. Data Table Requirement 1. Calculate the after-tax operating income per unit eamed by each division under the following transfer-pricing methods: (a) computation of the cost-based transfer prices.) The costs for the work done in each division for a single desktop computer are as Begin with calculating the after-tax operating income for the China division under each method. Then complete the table for South Korea andfollows: Method A Method B Method C China division: Variable cost 1,000 yuan Fixed cost = 1.800 yuan China division Division revenue per unit Cost per unit: South Korea division: Variable cost 360,000 won Fixed cost = 480,000 won Division variable cost per unit U.S. division Variable cost = $100 Division fixed cost per unit Fixed cost = $200 Chinese income tax rate on the China division's operating income: 40% South Korean income tax rate on the South Korea division's operating income: 20% U.S. income tax rate on the US. division's operating income: 28% * Total division cost per unit Divislon operating income per unlt Income tax at 40% Division net income per unit * Each desktop computer is sold to retail outiets in the United States for $3,200. Assume that the current foreign exchange rates are as follows: 8 yuan $1 U.S. 1,200 won$1 US. Both the China and the South Korea divisions sell part of their production under a private label. The China division sells the comparable memory/keyboard package used in each User Able desktop computer to a Chinese manufacturer for 3,600 yuan. The South Korea division sells the comparable desktop computer to a South Korean distr butor for 1,580,000 won. Enter any number in the edit fields and then click Check Answer. Clear All