The Icy Corporation manufactures snowblowers outside Chicago to sell locally, inside the US and around the world. An international division in Oslo orders $200,000$ blowers annually. The following data is available about this internal transfer:

Variable manufacturing cost$/$snowblower $$100$

Full manufacturing cost $/$snowblower $$175$

Selling price $($net of marketing costs$)$ in Oslo $$300$

US income tax rate on the US division $30\%$

Norwegian income tax rate on Oslo division $35\%$

Norwegian import duty $20\%$

Suppose the US and Norwegian tax authorities only allow transfer prices that are between the full manufacturing cost per unit and the market price of $$250,$ based on comparable snowblower imports. The Norwegian duty is charged on the price at which the product is transferred into Norway. This duty is a tax deductible expense for calculating Norwegian income.

$1.$ Calculate the after$-$tax operating income earned by the US and Oslo divisions from transferring $200,000$ snowblowers $($a$)$ at full manufacturing cost and $($b$)$ at the $$250$ market price. NOTE: Income taxes are not included in the computation of the cost$-$based transfer prices.

$2.$ Which transfer price should Icy Corporation use to minimize the total of company import duties and income taxes? Show all computations and explain your reasoning.