The start-up division of the Alberta company is located in a country with a corporate tax of 10% and the exclusive division of the company Alberta is located in a country with a tax rate of 30%. What conclusion can you access after analyzing the data in the illustration? There they compare the after-tax contribution margins of a company using a transfer price per unit of $ 18.00 versus a transfer price per unit of $ 11.00

$18.00 Transfer Price

Boot Division

Selling Price hiking boots	$90.00
Variable boot manufacturing boot ( not including sole)	35.00
Cost of sole purchased internally	18.00
Before tax distribution Margin	37.00
Tax At 10%	3.70
After tax Contribution Margin	33.70

$18.00 Tranfer price

Sole Division

Selling price of sole	$18.00
Variable cost per sole	11.00
Before tax contribution margin	7.00
Tax of 30%	2.10
After tax contribution margin	4.90

Before tax contribution margin per unit to the company = 37+7 =$44.00

After tax total contribution margin per unit to company = 33.30 + 4.90 = 38.20

$11.00 Transfer Price

Boot Division Selling Price hiking boots $90.00 Variable boot manufacturing boot ( not including sole) 35.00 Cost of sole purchased internally 11.00 Before tax distribution Margin 44.00 Tax At 10% 4.40 After tax Contribution Margin 39.60

Sole division

Selling price of sole $11.00 Variable cost per sole 11.00 Before tax contribution margin 0.00 Tax of 30% 0.00 After tax contribution margin 0.00

Before tax contribution margin per unit to the company =44.44 + 0 = $44.00

After tax total contribution margin per unit to company = 39.60 + 0 = $39.60