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:

Prenatal Development

The development and growth journey inside the womb, starting from conception and culminating in birth.

Adult Personality

The patterns of thought, feeling, and behavior that are characteristic of an individual and that are typically fully developed or matured in adulthood.

Early Childhood

A developmental period ranging from birth to eight years old, focusing on the growth and learning of young children.

Stability And Change

A concept in psychology that recognizes the balance between the consistency of an individual's personality traits over time (stability) and their potential to change and evolve (change).