Usco Inc. manufactures a product for $20 per unit that is sold to its affiliate, Foreignco, for $24 per unit. Foreignco sells the product at $30 per unit in the local market. Assuming a U.S. tax rate of 21% and Foreignco's local income rate of 10%, the total income tax is calculated as follows:

	Usco	Foreignco	Total
Sales	$24	$30	$30
Cost of sales	20	24	20
Taxable income	$4	$6	$10
Tax liability	$0.84 (21%)	$0.60 (10%)	$1.44

Assume the IRS adjusts the transfer price to $28. Determine the total income tax if the tax authority of Foreignco's local government does not provide a correlative adjustment.

Group of answer choices

$2.28

$1.44

$1.88

$1.04