1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
jarptica [38.1K]
2 years ago
10

Stone Foods produces the majority of its cheese products in its U.S. based dairy division at a total outlay cost of $6.00 per un

it. A large portion of the finished product is sold to Division B where it is packaged and sold overseas under a different label. The tax rate in Division B's country is higher than the U.S. tax rate. Assume the company desires to minimize the overall tax impact of the transfer (i) what type of relative pre-tax income should each division desire to achieve as a result of the transfer and (ii) what type of transfer price would accomplish your answer to (i).
Dairy Division Income Division B Income Transfer Price
A High Low Low
B Low High Low
C. Low High High
D. High Low High
E. Low High Low

Which letter A, B, C, D, or E is the correct answer?
Business
1 answer:
lubasha [3.4K]2 years ago
3 0

Answer:

Stone Foods produces the majority of its cheese products in its U.S. based dairy division at a total outlay cost of $6.00 per unit. A large portion of the finished product is sold to Division B where it is packaged and sold overseas under a different label. The tax rate in Division B's country is higher than the U.S. tax rate. Assume the company desires to minimize the overall tax impact of the transfer (i) what type of relative pre-tax income should each division desire to achieve as a result of the transfer and (ii) what type of transfer price would accomplish your answer to (i).  

Dairy Division Income Division B Income Transfer Price .

Option  "D"  is the correct answer -  High Low High.

Explanation:

Since in Division B, the tax rate is higher than the tax rate in US-based dairy division. Therefore to minimize the impact of the overall tax, transfer price from dairy division should be high to Division B so that the dairy division income would be higher. and the income of Division B would be lower.

Hence option  "D" is the correct answer.

You might be interested in
Jon had adjusted gross income of $25,000 in 2019. During the year, he incurred and paid the following medical expenses: - Drugs
finlep [7]

Answer:

The allowable medical deduction after Adjusting Total Income is $0

Explanation:

Particulars                                                           Amount

Drugs and Medicines prescribed by doctors        $300

Add:- Health insurance premium                            $750

Add:- Doctors Fees                                                  $2,250

Add:- Eyeglasses                                                      $75

Less:- Reimbursement of doctors fees received   <u>($900)</u>

                                                                                  $2,475

Less :- Adjusted Gross Total Income of $25,000  <u>$2,500</u>

Allowable medical deduction after adjusting            -25

total Income

Therefore, as the resultant amount is negative. The allowable medical deduction after Adjusting Total Income is $0

Workings

Adjusted Gross Total Income of $26,000

= $26000 × 10%

= $2,600

5 0
2 years ago
Amanda is a twenty-four year old student. For two years Amanda has been going to gym and using weight equipment, stationary bicy
Marta_Voda [28]

Answer:

e. All of the other choices

Explanation:

Product liability is the responsibility that a company bears for injury caused by its products as a result of a defect.

In this instance Musclematic, has known for the past year that this problem existed, but the company took no steps to warn people who owned or used these machines of the problem.

So for any injury users have they will be liable.

If Amanda files a lawsuit against Musclematic they will have to consider:

- How this litigation will affect its goodwill

- Whether or not a settlement with Amanda is a viable option

- Whether this suit will adversely affect other business relationships

- The costs associated with litigating this claim

This is because they will most likely lose the case.

7 0
2 years ago
Hochberg Corporation uses an activity-based costing system with the following three activity cost pools: Activity Cost Pool Tota
UkoKoshka [18]

Answer:

The correct answer is 2.39

Explanation:

TOTAL WAGES AND SALARIES = $433,000

DEPRECIATION  = $160,000

OCCUPANCY = $169,000

TOTAL  = $762,000

here for calculating the activity rate for activity cost pool , we will only use the given percentages of wages and salaries, depreciation and occupancy in the activity cost pool -

                         Amount            Activity cost pool              Amount allocated

Wages             $433,000                     20%                            $86,600  

Depreciation   $160,000                      10%                             $16,000

Occupancy      $169,000                      10%                             $16,900

TOTAL                                                                                       $119,500

Cost driver machine hours                                                       50,000

Rate per machine hour                                                        $119,500 / 50,000

                                                                                                    2.39

Therefore the activity rate for activity cost pool is 2.39

4 0
3 years ago
Larry’s Landscaping has total liabilities of $1,650 and assets of $2,500. The amount of the owner’s equity is
slava [35]
$850 is correct                                            
6 0
3 years ago
Read 2 more answers
Why do entrepreneurs play a key role in a market​ system?
valentina_108 [34]

They bring together factors of production such as land, labor, capital, and enterprise.

8 0
3 years ago
Other questions:
  • Among the things that an organization should consider when planning for pandemics are: ________
    14·1 answer
  • Manley operates a law practice on the accrual method and calendar year. At the beginning of the year Manley's firm had an allowa
    15·1 answer
  • Suppose a mutual fund yielded a return of 14% last year. The risk-free rate was 5% last year and the stock market return was 10%
    6·1 answer
  • Demonstrate an understanding of the Five Forces Model by choosing an organization or product - then by answering the questions,
    5·1 answer
  • The​ after-tax cost of debt is higher than the​ before-tax cost of debt. True or False
    13·1 answer
  • A stock with a beta of 0.8 has an expected rate of return of 12%. If the market return this year turns out to be 5 percentage po
    15·1 answer
  • Predetermined Factory Overhead Rate Exotic Engine Shop uses a job order cost system to determine the cost of performing engine r
    6·1 answer
  • In an Argand diagram, the point P represents the complex number z, where z = x + iy. Given that z + 2 = λi(z + 8), where λ is a
    7·1 answer
  • f a company is considering the purchase of a parcel of land that was acquired by the seller for $85,000, is offered for sale at
    13·1 answer
  • Is debtors control a current asset, owners equity, income or current liability
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!