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Northfield Manufacturing has two operating divisions in a semiautonomous organizational structure. Americas Division, based in the United States, produces a specialized memory chip that

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Northfield Manufacturing has two operating divisions in a semiautonomous organizational structure. Americas Division, based in the United States, produces a specialized memory chip that is an input to Asia Division, based in Japan. Americas Division uses idle capacity to produce the component, which has a domestic market price of $105. Its variable costs are $52 per unit. Northfield's U.S. tax rate is 25 percent of income. In addition to the transfer price for each component received from Americas, Asia Division pays an $51 per unit shipping fee. The chip becomes a part of its assembled product, which costs an additional $45 to produce and sells for an equivalent of $248. Asia could purchase the component from an Asian supplier for $93 per unit. Northfield's tax rate in Japan is 30 percent of income. Assume that Japanese tax laws permit transferring at either variable cost or market price. Required: a-1. What are the respective profits after tax for both the Americas Division and Asia Division of Northfield Manufacturing if the transfer price is $52? a-2. What are the respective profits after tax for both the Americas Division and Asia Division of Northfield Manufacturing if the transfer price is $105? a-3. What transfer price is economically optimal for Northfield Manufacturing? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req A3 What are the respective profits after tax for both the Americas Division and Asia Division of Northfield Manufacturing if the transfer price is $52? Note: Round your answers to 2 decimal places. Profit after tax (Americas) Profit after tax (Asia) per unit per unit < Req A1 Req A2 >

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