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The Bear Company manufactures chainsaws at its plant in Sandusky. Ohio. The company has marketing divisions throughout the world. A Bear marketing division in Lille,
The Bear Company manufactures chainsaws at its plant in Sandusky. Ohio. The company has marketing divisions throughout the world. A Bear marketing division in Lille, France, imports 200,000 chainsaws annually from the United States. The following Information is available: (Click the icon to view the information.) (Click to view additional information.) Read the requirements Requirement 1. Calculate the after-tax operating income eamed by the United States and French divisions from transferring 200.000 chainsaws (a) at full manufacturing cost per unit and (b) at market price of comparable imports. (Income taxes are not included in the computation of the cost-based transfer prices.) Begin by calculating the after-tax operating income earned by the United States division from transferring 200,000 chain saws (a) at full manufacturing cost per unit. (Complete all input fields. Enter a " 0" for any zero balances.) Requirements 1. Calculate the after-tax operating income earned by the United States and French divisions from transferring 200,000 chainsaws (a) at full manufacturing cost per unit and (b) at market price of comparable imports. (Income taxes are not included in the computation of the cost-based transfer prices.) 2. Which transfer price should the Bear Company select to minimize the total of company import duties and income taxes? Remember that the transfer price must be between the full manufacturing cost per unit of $180 and the market price of $250 of comparable imports into. France. Explain your reasoning
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