- Chinglish Dirk A Chinglish Dirk Company Hong Kong Exports Razor Blades To Its Wholly Owned Parent Company Torringt 1 (77.2 KiB) Viewed 31 times
Chinglish Dirk Consolidated Constructing Transfer (Sales) Price per Unit Torrington Edge (British pounds) (British pounds) (British pounds) Direct costs £ 10,000 £ 16,100 4,000 1,000 £ 14,000 £ 17,100 Overhead Total costs Desired markup Transfer price (sales price) 2,100 2,565 £ 16,100 £ 19,665 Income Statement Sales price £ 48,300,000 £ 58,995,000 Less total costs (51,300,000) (42,000,000) 6,300,000 £ Taxable income £ 7,695,000 Less taxes (2,462,400) £ 3,722,400 (1,260,000) 5,040,000 £ Profit, after-tax £ 5,232,600 £ 10,272,600
Calculate the profits of Chinglish Dirk and Torrington Edge, and the consolidated results of both, if the markup at Chinglish was increased to 20% and the markup at Torrington was reduced to 10% in the following table: (Round to the nearest British pound.) Chinglish Dirk Consolidated Constructing Transfer (Sales) Price per Unit Torrington Edge (British pounds) (British pounds) (British pounds) Direct costs £ 10,000 £ Overhead 4,000 1,000 Total costs £ 14,000 £ Desired markup Transfer price (sales price) £ ء £ Income Statement Sales price £ £ Less total costs Taxable income £ 19 £ Less taxes £ Profit, after-tax £ £