Question
Ulsa Company has manufacturing subsidiaries in Malaysia and Malta. It is considering shipping the subcomponents of Product Y to one or the other of these
Ulsa Company has manufacturing subsidiaries in Malaysia and Malta. It is considering shipping the subcomponents of Product Y to one or the other of these countries for final assembly. The final product will be sold in the country where it is assembled. Other information is as follows: |
Malaysia | Malta | |||||||||
Average exchange rate | $ | 1 = 4.30 | ringgits | $ | 1 = 0.40 | lira | ||||
Import duty | 7 | % | 17 | % | ||||||
Income tax rate | 20 | % | 10 | % | ||||||
Unit selling price of Product Y | 645 | ringgits | 70 | liri | ||||||
Price of subcomponent | 215 | ringgits | 20 | liri | ||||||
Final assembly costs | 200 | ringgits | 25 | liri | ||||||
Number of units to be sold | 13,600 | units | 7,400 | units | ||||||
|
In both countries, the import duties are based on the value of the incoming goods in the receiving country's currency. |
Instructions |
a. | For each country, prepare an income statement on a per-unit basis denominated in that country's currency. (Amounts to be deducted should be indicated with a minus sign. Round your answers to 2 decimal places.) |
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