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Question 7 6 pts Osprey Co , manufactures kayaks in Jacksonville, Florida. Its variable costs per kayak is $ 3 0 0 and the full

Question 7
6 pts
Osprey Co, manufactures kayaks in Jacksonville, Florida. Its variable costs per kayak is $300 and the full manufacturing cost is $500. Osprey ships 1,000 kayaks to a division in Mexico. The Mexico division sells the kayaks to resorts in Mexico at an average price of $1,000. Osprey pays a 28% tax on the U.S. division's income. Mexico levies a 30% tax on income in Mexico. Both tax authorities only allow transfer prices that are between the full manufacturing cost per unit and a market price of $900, based on comparable imports into Mexico.
What transfer price should Osprey select to minimize the company's tax liability?
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12pt vv Paragra
Question 7
6 pts
Osprey Co. manufactures kayaks in Jacksonville, Florida. Its variable costs per kayak is $300 and the full manufacturing cost is $500. Osprey ships 1,000 kayaks to a division in Mexico. The Mexico division sells the kayaks to resorts in Mexico at an average price of $1,000. Osprey pays a 28% tax on the U.S. division's income. Mexico levies a 30% tax on income in Mexico. Both tax authorities only allow transfer prices that are between the full manufacturing cost per unit and a market price of $900, based on comparable imports into Mexico.
What transfer price should Osprey select to minimize the company's tax liability?
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