People Able Computer, Inc., with headquarters in San Francisco, manufactures and sells a desktop computer. People Able has three divisions, each of which is located in a different country. Each division is run as a profit center. Information on each division follows: Requirements 1. Calculate the after-tax operating income per unit earned by each division under the following transfer-pricing methods: (a) market price, (b) 200% of full cost, and (c) 350% of variable cost. (Income taxes are not included in the computation of the cost-based transfer prices.) E (Click the icon to view the data.) 2. Which transfer-pricing method(s) will maximize the after-tax operating income per unit of People Able Computer? Requirement 1. Calculate the after-tax operating income per unit earned by each division under the following transfer-pricing methods: (a) market price, (b) 200% of full cost, and (c) 350% of variable cost. (Income taxes are not included in the computation of the cost-based transfer prices.) Begin with calculating the after-tax operating income for the China division under each method. Then complete the table for South Korea Data table Method A Method C Method B China division The costs for the work done in each division for a single desktop computer are as follows: Division revenue per unit Cost per unit: China division: Variable cost = 1,200 yuan Division variable cost per unit Fixed cost = 2,300 yuan Division fixed cost per unit South Korea division: Variable cost = 390,000 won Fixed cost = 520,000 won Total division cost per unit U.S. division Variable cost = $170 Division operating income per unit Fixed cost = $175 Income tax at 30% • Chinese income tax rate on the China division's operating income: 30% • South Korean income tax rate on the South Korea division's operating income: 20% • U.S. income tax rate on the U.S. division's operating income: 40% Division net income per unit Each desktop computer is sold to retail outlets in the United States for $3,800. Assume that the current foreign exchange rates are as follows: 10 yuan = $1 U.S. 1,300 won = $1 U.S. Both the China and the South Korea divisions sell part of their production under a private label. The China division sells the comparable memory/keyboard package used in each People Able desktop computer to a Chinese manufacturer for 3,900 yuan. The South Korea division sells the comparable desktop computer to a South Korean distributor for 1,430,000 won. Help me solve this Etext pages Get more help -