Prepare an income statement using given data

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Reference no: EM132082409

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 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	8	%	18	%
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	13,400	units	7,100	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.)

Reference no: EM132082409

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