Ulsa company has manufacturing subsidiaries in malasia and malta. It is considering shipping the subcomponents of Product Y to one or the other of these conties for final assembly. The final product will be sold in the country where it is assembled. Other information is as followed.

                                                Malaysia                               Malta                 

Average exchange rate               $1=4.3 ringgits                      $1=0.40 lira

import duty                                 5%                                       15%

Income tax rate                           20%                                      10%

Unit selling price of Product Y      645 ringgits                            70 lira

Price of subcomponent                215 ringgits                            20 lira

Final assembly costs                     200 ringgits                           25 lira

Number of units to be sold           12,000 units                           8,000 units

 

In both countries the import duties are based ont he value of the incoming goods in the receiving countries currency.

 

a. For each country, prepare and income statement on a per-unit based denomination in that country's currency.