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? 
Definitions:
Market Price
The going rate at which a particular market offers to buy or sell an asset or service.
Average Revenue
The revenue earned per unit of output sold; calculated by dividing the total revenue by the number of units sold.
Total Revenue
The total amount of money received by a firm from selling its goods or services.
Total Cost
The complete amount of money required for the production of a given level of output, including both fixed and variable costs.
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