USF manufactures and sells desktop organizing systems.There are three global locations:

1.China

a.Variable Costs = 1,000 yuan

b.Fixed Costs = 1,800 yuan

c.Market Price for components = 3,600 yuan

d.Tax rate = 20%

e.8 yuan = $1 CDN

2.South Korea

a.Variable Costs = 360,000 won

b.Fixed Costs = 480,000 won

c.Market Price for assemble pieces = 1,560,000 won

d.Tax rate = 20%

e.1,200 won = $1 CDN

3.Canada

a.Variable Costs = $100

b.Fixed Costs = $200

Selling Price = $3,200

c.Tax rate = 30%

(i)Discuss the difference between transfers made at market price versus transfer prices designed to maximize profits.Show calculations for the profit maximizing scenario.

(ii)Include other factors that should be considered if looking to maximize profits.