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Sharpex (Hong Kong) exports 1,000 containers of razor blades to its U.S. based parent company, Eversharp. Hong Kong tax rates are 15% and the U.S.
Sharpex (Hong Kong) exports 1,000 containers of razor blades to its U.S. based parent company, Eversharp. Hong Kong tax rates are 15% and the U.S. tax rates are 35%. With the desired markup of 15% for each division, what is the consolidated after-tax profit? Use the following table to answer your question: Construction Price Per Container Direct costs Overhead Total costs Desired markup (15%) Transfer price (Sales price) Sharpex (Hong Kong) USD 10,000 USD 6,000 USD 16,000 USD 2,400 USD 18,400 Eversharp (U.S.) USD 18,400 USD 1,000 USD 19,400 USD 2,910 USD 22,310 USD 3,716,250 a. USD 3,559,500 b. . USD 3,452,250 USD 3,931,500 d. USD 3,141,000 e
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