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Samsung evaluates transfer pricing with Division A production cost $15/unit and Division B external purchase price $18/unit, transfer price $17/unit. Requirements: Calculate the impact of

  1. Samsung evaluates transfer pricing with Division A production cost $15/unit and Division B external purchase price $18/unit, transfer price $17/unit.
    • Requirements:
      • Calculate the impact of transfer pricing on Division A’s profitability.
      • Calculate the impact of transfer pricing on Division B’s profitability.
      • Prepare a transfer pricing policy recommendation.
      • Discuss the tax implications of transfer pricing.

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