Suppose that the U.S. division could sell as many units of Product 4A36 as it makes at $900 per unit in the U.S. market, net of all marketing and distribution costs.

(1) From the viewpoint of the Mornay Company as a whole, would after-tax operating income be maximized if it sold the 10,000 units of Product 4A36 in the U.S. (for $900) or in Austria (for the full manufacturing cost amount given in the class example)? Show your calculations.

(2) Suppose the division managers bonus is based on her divisions after-tax operating income. If the manager wants to maximize her bonus, which alternative (1) selling the full manufacturing cost of $800 per unit (shown in the class example) or (2) selling for $900 per unit would meet this objective? Show how you came up with your answer.

(3) This problem illustrates a lack of goal congruence. What is goal congruence? Why is there a lack of goal congruence in this problem? How can the managers bonus method be changed so that goal congruence is achieved (dont overthink this, the solution is easy).