# 08 - 22-18(Cont'd Problem 1 Method A Internal Transfers at...

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Unformatted text preview: 22-18 (Cont'd.) Problem 1 Method A: Internal Transfers at Market Price Method B: Internal Transfers at 200% of Full Costs China Division Division revenues per unit Deduct: Division variable costs per unit Division fixed costs per unit 125 225 100 40 \$ 60 125 225 350 140 \$210 125 225 25 10 \$ 15 \$450 \$700 \$375 Method C: Internal Transfers at 300% of Variable Costs Division operating income per unit Income tax Division net income per unit South Korea Division Division revenues per unit Deduct: Transferred in costs per unit Division variable costs per unit Division fixed costs per unit Division operating income per unit Income tax Division net income per unit 450 300 400 150 30 \$ 120 700 300 400 1,400 280 \$1,120 375 300 400 950 190 \$ 760 \$1,300 \$2,800 \$2,025 United States Division Division revenues per unit Deduct: Transferred in costs per unit Division variable costs per unit Division fixed costs per unit Division operating income per unit 1,300 100 200 1,600 2,800 100 200 100 2,025 100 200 875 \$3,200 \$3,200 \$3,200 Income tax Division net income per unit 480 \$1,120 \$ 30 70 262.50 \$612.50 Problem 2 Division Net Income Market Price 200% of Full Costs 300% of Variable Costs \$15 \$760 \$612.50 \$1,387.50 China Divison South Korea Division U.S. Division User Friendly Computer, Inc. \$60 \$120 \$1,120 \$1,300 \$210 \$1,120 \$70 \$1,400 ...
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08 - 22-18(Cont'd Problem 1 Method A Internal Transfers at...

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