Manufacturing cost and selling price

Assignment Help Accounting Basics

Reference no: EM13137357

Starbright Corporation produces goods in the United States. The market is strong enough that they can sell all they produce. They sell much of their product to a division of their parent company in Sweden. The manufacturing costs for the product is $760.They can sell this product in the U.S. for $1100. The U.S. tax rate is 40%. Sweden can use the product to produce a hot-selling item in Sweden. The selling price of this Swedish product is $1,450. There is a 10% duty tax on all imported items and the Swedish division will incur an additional $100 to complete their product. The tax rate in Sweden is 55%. There is an additional shipping charge of $50 per unit to ship the material to Sweden.

Transfer prices must be set at U.S. manufacturing cost or the selling price in the U.S.

1. Which transfer price is optimal for the U.S. division? (show your calculations)

2. Which price is optimal for the Swedish division? (show your calculations)

3. Which price is optimal for the corporation?

Reference no: EM13137357

Questions Cloud

Elections in state of tennessee : A discussion regarding elections in Tennessee. How are elections run in Tennessee? What type of voter, candidate, and committee information do elections provide?

Find probability that blood pressure lie in range : If an individual from this age group is selected, find the probability that his or her blood pressure will be between 70 and 95. Assume normal distribution.

Interest groups-political parties : What is the difference between a political party and an interest group? Research an interest group in Nashville Tennessee and share some interesting information about the group.

What is the name of the journal shown above : The following special journal is taken from a merchandising company that uses the perpetual inventory system: What is the name of the journal shown above?

Manufacturing cost and selling price : The tax rate in Sweden is 55%. There is an additional shipping charge of $50 per unit to ship the material to Sweden. Transfer prices must be set at U.S. manufacturing cost or the selling price in the U.S.

The exchange qualifies as what type of transaction : I n exchange for all of the Quartz stock, Hugh receives 1,000 shares of Turquoise Corporation common stock (value $20,000), and Stacy receives 50 shares of Turquoise preferred (value $20,000). Hugh also receives $160,000 in bonds. The exchange qu..

Hat is the mass in grams : If the density of mercury is 13.6 g/mL. What is the mass in grams of 15.6 L of mercury?

Considerations in immigration policy making : Dye (2008) argues that the success of immigration reform in the United States has been partially successful even though the Hispanic American population is increasing.

Find number of defective lamps will be less : Particular brand that they buy. A retailer has ordered a consignment of 5000 such lamps for its chain store nationwide. What is the probability that, the number of defective lamps will be 500 or less?

User Account

All Pages