15 - 22-23 (Cont'd.) SOLUTION EXHIBIT 22-23 Division...

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Unformatted text preview: 22-23 (Cont'd.) SOLUTION EXHIBIT 22-23 Division Incomes of U.S. and Austrian Divisions from Transferring 1,000 Units of Product 4A36 Method A: Internal Transfers at Full Manufacturing Cost U.S. Division Revenues: $500, $650 1,000 units Deduct: Full manufacturing cost: $500 1,000 units Division operating income Division income taxes at 40% Division after-tax operating income Austrian Division Revenues: $750 1,000 units Deduct: Transferred-in costs: $500 1,000, $650 1,000 units Import duties at 10% of transferred-in price $50 1,000, $65 1,000 units Division operating income Division income taxes at 44% Division after-tax operating income Method B: Internal Transfers at Market Price $500,000 $650,000 500,000 0 $ 0 0 500,000 150,000 60,000 $ 90,000 $750,000 $750,000 500,000 650,000 50,000 200,000 88,000 $112,000 65,000 35,000 15,400 $ 19,600 ...
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This note was uploaded on 02/05/2012 for the course ACCOUNTING acct 504 taught by Professor Dehmal during the Spring '10 term at DeVry Pittsburgh.

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