Crain Company has a manufacturing subsidiary in Singapore that produces high-end exercise equipment for U.S. consumers....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Crain Company has a manufacturing subsidiary in Singapore that produces high-end exercise equipment for U.S. consumers. The manufacturing subsidiary has total manufacturing costs of $1,470,000, plus general and administrative expenses of $347,000. The manufacturing unit sells the equipment for $2,470,000 to the U.S. marketing subsidiary, which sells it to the final consumer for an aggregate of $3,470,000. The sales subsidiary has total marketing, general, and administrative costs of $197,000. Assume that Singapore has a corporate tax rate of 17% and that the U.S. tax rate is 21%. Assume that no tax treaties or other special tax treatments apply. Required: What is the effect on Crain Company's total corporate-level taxes if the manufacturing subsidiary raises its price to the sales subsidiary by 20%? (Do not round intermediate calculations. Input all amounts as positive values.) Total from Subsidiaries Income prior to increase in transfer price Revenues Direct costs Other costs Profit before tax Тax Profit after tax Income after increase in transfer price Revenues Direct costs Other costs Profit before tax Тах Profit after tax Difference in after-tax profit Crain Company has a manufacturing subsidiary in Singapore that produces high-end exercise equipment for U.S. consumers. The manufacturing subsidiary has total manufacturing costs of $1,470,000, plus general and administrative expenses of $347,000. The manufacturing unit sells the equipment for $2,470,000 to the U.S. marketing subsidiary, which sells it to the final consumer for an aggregate of $3,470,000. The sales subsidiary has total marketing, general, and administrative costs of $197,000. Assume that Singapore has a corporate tax rate of 17% and that the U.S. tax rate is 21%. Assume that no tax treaties or other special tax treatments apply. Required: What is the effect on Crain Company's total corporate-level taxes if the manufacturing subsidiary raises its price to the sales subsidiary by 20%? (Do not round intermediate calculations. Input all amounts as positive values.) Total from Subsidiaries Income prior to increase in transfer price Revenues Direct costs Other costs Profit before tax Тax Profit after tax Income after increase in transfer price Revenues Direct costs Other costs Profit before tax Тах Profit after tax Difference in after-tax profit
Expert Answer:
Answer rating: 100% (QA)
Answer Solution Total from Subsidiaries Subsidiary Income pr... View the full answer
Related Book For
Cost Management A Strategic Emphasis
ISBN: 978-0077733773
7th edition
Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins
Posted Date:
Students also viewed these accounting questions
-
Crain Company has a manufacturing subsidiary in Singapore that produces high-end exercise equipment for U.S. consumers. The manufacturing subsidiary has total manufacturing costs of $1,500,000, plus...
-
Crane Company has a manufacturing subsidiary in Singapore that produces high-end exercise equipment for U.S. customers. The manufacturing subsidiary has total manufacturing costs of $1,500,000, plus...
-
Harris Company has a manufacturing subsidiary in Singapore that produces high-end exercise equipment for U.S. consumers. The manufacturing subsidiary has total manufacturing costs of $1,500,000, plus...
-
A two block system with weights W and Wo is shown above. Wo is pulling W over the table at a steady velocity U. Derive the algebraic expression for this velocity as it slides on a film of oil with a...
-
The global economic crisis was caused by the meltdown in the U.S. housing market. Should the U.S. government bear some of the responsibility of bailing out the economies of all countries that were...
-
Refer to Problem 1.13. The pay will be $8 per hour for employees. Charles Lackey can also improve the yield by purchasing a new blender. The new blender will mean an increase in his investment. This...
-
In a risk management program, the unit of analysis is: a. The exposure on which the audit team is focusing b. The business process or function to be audited c. The weighting assigned to a generic...
-
Comparative income statements and balance sheets for Merck ($ millions) follow: Required: a. Use the following ratios to prepare a projected income statement, balance sheet, and statement of cash...
-
The Supreme Court has said all but one of the following circumstances are ones in which the death penalty cannot be applied. Which of these IS a circumstance, according to the Court, in which the...
-
Give a correct name for a. (CH3)2CHCH2OCH2CH3 b. c. O- CH2CH2CH,
-
Subatomic Shirts' standard cost included 0.70 metres of direct material per t-shirt at $3.80 per metre. Subatomic actually used 32,500 metres of direct material at a cost of $3.75 per metre to...
-
description of the Project Management Process group, also commonly called the Project Life Cycle and explain why it is important to the management of a project. In your submission, also address in...
-
The following data are taken from the financial statements of Carla Vista Co.. The data are in alphabetical order. Accounts payable $28,600 Net sales $572,000 Accounts receivable 73,000 Other current...
-
If the motion of a sunspot was tracked at a latitude of approximately 30S , and a second sunspot was tracked at a latitude of 30N , how much difference in their rates would you calculate due to...
-
A branch circuit supplies 6 receptacles. the branch circuit originates in a 120/240-volt 1O, 3 wire panel board. The 14 awe circuit conductors are connected to a 15-a circuit breaker. the receptacles...
-
A sample of blood is placed in a centrifuge of radius .15 m. The mass of a red corpuscle is 3.0 x 10 -16 kg, and the magnitude of the force required to make it settle out of the plasma is 4.0 x 10...
-
"Beyond them, a smaller vista opens into a landscape." Element(s): Click or tap here to enter text. "...the view backward into the room and the division of the space into progressively
-
When is the indirect pattern appropriate, and what are the benefits of using it?
-
This assignment is designed to introduce you to the preparation of both a one-variable and a two-variable "data table" in Excel 2010. Such tables are useful for conducting and reporting the results...
-
Plantcity is a large nursery and retail store specializing in house and garden plants and supplies. Jean Raouth, the assistant manager, is in the process of budgeting monthly supplies expense for...
-
Explain activity-based process costing, and give an example of a company that uses it.
-
Presented below are cash flow data for L.A. Gear Inc. During this period of time, the manufacturer of athletic shoes and sportswear experienced a 1200 percent growth in net income. Required 1....
-
L.A. Gear, a manufacturer of sports shoes and sportswear, began operations in the early 1980s. By late 1996, however, the company was in bankruptcy. Following are cash flow data for the company for...
-
The following financial data were taken from the Catalina Divers Supply Company for the year ended December 31, 2017. Required Using the above data, prepare the 2017 statement of cash flow for...
Study smarter with the SolutionInn App