The Variable Cost of Part X Is $50 and the Full

question 161

Multiple Choice

The variable cost of Part X is $50 and the full cost of the part is $80. The part is produced in country A and transferred to a plant in country B. Country A has a 30% income tax rate. Country B has a 50% income tax rate and an import duty equal to 10% of the price of the item. Part X can be transferred at full cost or variable cost. Assume that Part X is priced at full cost. The income tax effect per unit in country B is:

• A) an increase in tax by $9 per unit
• B) an increase in tax by $15 per unit
• C) a decrease in tax by $9 per unit
• D) a decrease in tax by $15 per unit

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Definitions:

-0.55 < Z < 0.55

Represents a range on the Z-score scale, which indicates values that are within this interval on a standard normal distribution.

-0.73 < Z < 2.27

A statistical range between Z-scores indicating that data points fall within this interval on a standard normal distribution.

0.7 < Z < 1.98

Specifies a range within the standard normal distribution, indicating values between Z = 0.7 and Z = 1.98.

-1.10 < Z < -0.36

Indicates a range between two Z-scores on a standard normal distribution, capturing data points within this specific interval.