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

question 19

Multiple Choice

Division A transfers a profitable subassembly to Division B,where it is assembled into a final product.Division A is located in New Zealand,which has a high tax rate.Division B is located in Thailand,which has a low tax rate.Ideally, (1) which type of before tax income should each division report from the transfer and (2) what type of transfer price should be set for the subassembly?
Division A
Division B
Division C
Income
Income
Price

• A) low
• Low
• Low
• B) low
• High
• Low
• C) low
• High
• High
• D) high
• Low
• High

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Definitions:

Patient Safety

A healthcare discipline focused on minimizing harm to patients through the prevention, reduction, reporting, and analysis of medical error.

Anticoagulant

A substance that prevents the clotting of blood, used therapeutically to prevent or treat thrombosis and embolism.

Vitamin E

A group of eight fat-soluble compounds that include tocopherols and tocotrienols, known for its antioxidant properties and importance in skin health and protecting cells from damage.

Potential Complication

A possible adverse event or outcome that may arise from a condition, procedure, or treatment.