Division a Transfers a Profitable Subassembly to Division B,where It

question 57

Multiple Choice

Division A transfers a profitable subassembly to Division B,where it is assembled into a final product.A is located in a European country that has a high tax rate;B is located in an Asian country that has a low tax rate.Ideally,(1) what type of before-tax income should each division report from the transfer and (2) what type of transfer price should Division A set for the subassembly?

• A)Choice A
• B)Choice B
• C)Choice C
• D)Choice D
• E)Choice E

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Definitions:

Customer Objective

Customer objective involves defining what a business aims to achieve in relation to its customers, such as increasing customer satisfaction, loyalty, or retention rates.

Marketing Budget Allocations

The distribution of financial resources among various marketing activities or channels.

Past Sales

Past sales refer to the historical record of a product's or company's sales volume over a designated period, used for trend analysis, forecasting, and strategic planning.

Profits_

The financial gain realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.