Problem 19-52 (Algo) Transfer Pricing; Ethics [LO 19-4] Zen Manufacturing, Incorporated, is a multinational firm with sales and manufacturing centers in 15 countries. One of its manufacturing divisions, in country X, sells a product to a retail division in country Y for $320,000 per unit. The division in country X has manufacturing costs of $162,500 for this product. The retail division in country Y sells the product to final customers for $462,500 per unit. Zen is considering adjusting its transfer prices to reduce its overall corporate tax liability. Required: 1. Assume that both country X and country Y have corporate income tax rates of 40% and that no special tax treaties or benefits apply to Zen. What would be the effect on Zen's total tax burden if the manufacturing unit raises its price from $320,000 to $384,000? 2. What would be the effect on Zen's total taxes if the manufacturing unit raised its price from $320,000 to $384,000 and the tax rates in countries X and Y are 20% and 40%, respectively? (For all requirements, leave no cells blank; if there is no effect enter "O" and select "No effect" from dropdown.) 1. Effect on Zen's total tax when tax rates are same in both the countries 2. Effect on Zen's total tax when tax rates are different in countries X and Y