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Division a Transfers a Profitable Subassembly to Division B, Where

Question 53

Multiple Choice

Division A transfers a profitable subassembly to Division B, where it is assembled into a final product. Division A is located in New Zealand, which has a high tax rate. Division B is located in Thailand, which has a low tax rate. Ideally, (1) which type of before tax income should each division report from the transfer and (2) what type of transfer price should be set for the subassembly?
Division A transfers a profitable subassembly to Division B, where it is assembled into a final product. Division A is located in New Zealand, which has a high tax rate. Division B is located in Thailand, which has a low tax rate. Ideally, (1) which type of before tax income should each division report from the transfer and (2) what type of transfer price should be set for the subassembly? A) B) C) D)


A) Division A transfers a profitable subassembly to Division B, where it is assembled into a final product. Division A is located in New Zealand, which has a high tax rate. Division B is located in Thailand, which has a low tax rate. Ideally, (1) which type of before tax income should each division report from the transfer and (2) what type of transfer price should be set for the subassembly? A) B) C) D)
B) Division A transfers a profitable subassembly to Division B, where it is assembled into a final product. Division A is located in New Zealand, which has a high tax rate. Division B is located in Thailand, which has a low tax rate. Ideally, (1) which type of before tax income should each division report from the transfer and (2) what type of transfer price should be set for the subassembly? A) B) C) D)
C) Division A transfers a profitable subassembly to Division B, where it is assembled into a final product. Division A is located in New Zealand, which has a high tax rate. Division B is located in Thailand, which has a low tax rate. Ideally, (1) which type of before tax income should each division report from the transfer and (2) what type of transfer price should be set for the subassembly? A) B) C) D)
D) Division A transfers a profitable subassembly to Division B, where it is assembled into a final product. Division A is located in New Zealand, which has a high tax rate. Division B is located in Thailand, which has a low tax rate. Ideally, (1) which type of before tax income should each division report from the transfer and (2) what type of transfer price should be set for the subassembly? A) B) C) D)

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