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:
Output
The amount of goods or services produced by a firm, industry, or economy.
Substitutes For Leadership
Factors in the work setting that direct work efforts without the involvement of a leader.
Work Setting
The physical and social environment in which individuals perform their job duties.
People Involved
Refers to the individuals or groups participating in or affected by a particular activity, process, or decision.
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