The Alberta Company's Boot Division is located in a country with a 10% corporate tax rate and the Alberta Company's Sole Division is located in a 30% tax rate country.

1. What conclusion can you reach after analyzing the data in Exhibit 8B-1? It compares a company's after-tax contribution margins using a transfer price per unit of $18.00 versus a transfer price per unit of $11.00

Before-tax total contribution margin per unit to company =$37+$7=$44 After-tax total contribution margin per unit to company =$33.30+$4.90=$38.20 Before-tax total contribution margin per unit to company =$44+$0=$44 After-tax total contribution margin per unit to company =$39.60+$0=$39.60