American medical instruments produces a variety of medical

Reference no: EM13574367

American Medical Instruments produces a variety of medical products at its plant in Minneapolis. The company has sales divisions worldwide. One of the sales divisions is located in Uppsala, Sweden. Assume that the U.S. income tax rate is 34%, the Swedish rate is 60%, and a 12% import duty is imposed on the medical supplies brought into Sweden.

One product is produced in Minneapolis and shipped to Sweden is a heart difribilator. The variable cost of production is $400 per unit, and the fully allocated cost is $650 per unit.

Suppose the Swedish and the U.S. governments allow either the variable or the fully allocated cost to be used as a transfer price. Which should American Medical Instruments choose to minimize the total income taxes and import duties? Compute the amount the company saves if it uses your transfer price instead of the alternative. Assume the duties are not deductible for tax purposes.

Reference no: EM13574367

Questions Cloud

William hancock traded a delivery truck and 5000 cash for a : william hancock traded a delivery truck and 5000 cash for a newer van. this transaction has commericial substance.value

Beginning inventory purchases and sales data for portable : beginning inventory purchases and sales data for portable dvd players are as followsapril 1inventory120 units at

December 31 year-end and to allocate the 352500 net income : the following information applies to the questions displayed below. kim ries tere bax and josh thomas invested 30000

If a sound is 100 times louder than a whisper how loud is : if a sound is 100 times louder than a whisper how loud is that sound in

American medical instruments produces a variety of medical : american medical instruments produces a variety of medical products at its plant in minneapolis. the company has sales

Te cash is available in 2 days on average 1 calculate the : float measurement. on a typical day abc company writes checks totaling 3000. these checks clear in 7 days.

Explain what problems arise in trying to make conclusions : explain what problems arise in trying to make conclusions based on a survey mailed to the subscribers of a specialty

Assume interest rates for bonds today is 5 for an aaa rated : go to the yahoo finance bonds center.under bonds center click bond screenerclick the corporate check box under bond

I september direct labor was 45 of conversion cost if the : in september direct labor was 45 of conversion cost. if the manufacturing overhead for the month was 73700 and the

User Account

All Pages