People Friendly Computer, Inc., with headquarters in San Francisco, manufactures and sells a desktop computer. People Friendly has three divisions, each of which is located in a different country. Each division is run as a profit center. Information on each division follows: (Click the icon to view the data.) Requirements 1. Calculate the after-tax operating income per unit earned by each division under the following transfer pricing methods: (a) market price, (b) 200% of full cost, and (c) 400% of variable cost. (Income taxes are not included in the computation of the cost-based transfer prices.) 2. Which transfer pricing method(s) will maximize the after-tax operating income per unit of People Friendly Computer? Den Requirement 1. Calculate the after-tax operating income per unit earned by each division under the following transfer-pricing methods: (a) market price, (b) 200% of full cost, and (c) 400% of variable cost. (Income taxes are not included in the computation of the cost-based transfer prices.) puth Data Table Definition The costs for the work done in each division for a single desktop computer are as follows: China division: a. China division - manufactures memory devices and keyboards b. South Korea division - assembles desktop computers using locally manufactured parts, along with memory devices and keyboards from the China Division C. U.S. division - packages and distributes desktop computers Variable cost = 1,200 yuan Fixed cost = 1,800 yuan South Korea division: Variable cost = 340,000 won Fixed cost = 490,000 won Variable cost = $110 Fixed cost = $190 U.S. division Print Done 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 U.S. division's operating income: 30% Each desktop computer is sold to retail outlets in the United States for $4,200. Assume that the current foreign exchange rates are as follows: Enter any number in the edit fields and then click Check Answer. 8 yuan = $1 U.S. 1,000 won = $1 U.S. 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 People Friendly desktop computer to a Chinese manufacturer for 4,200 yuan. The South Korea division sells the comparable desktop computer to a South Korean distributor for 1,450,000 won. Help Me Solve This e Text Pages Get More Help