The Variable Cost of Part X Is $50 Per Unit

question 20

Multiple Choice

The variable cost of Part X is $50 per unit and the full cost of the part is $80 per unit.The part is produced in Country Z and transferred to a plant in Country B.Country Z 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 Part X is transferred at full cost.By using full cost instead of variable cost for the transfer price,the income tax effect per unit in Country Z is ________.

• A)a decrease in tax by $9 per unit
• B)an increase in tax by $9 per unit
• C)a decrease in tax by $24 per unit
• D)an increase in tax by $24 per unit

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Definitions:

Comprehensive Goals

Objectives that are broad and inclusive, encompassing a wide range of factors and aiming to achieve extensive outcomes.

Strong Motivator

A powerful influence or stimulus that encourages individuals to perform actions or achieve goals.

Smaller Steps

A strategy involving breaking down goals into manageable, smaller tasks to improve the likelihood of accomplishment.

Recognition Need

The human desire to be acknowledged and valued by others, particularly in the context of one's contributions or achievements.