$22-19.$ Multinational transfer pricing, effect of alternative transfer$-$pricing methods, global income tax minimization. User Friendly Computer, Inc., with headquarters in San Francisco, manufactures and sells a desktop computer. User Friendly has three divisions, each of which is located in a different country:a$.$ China Division$-$manufactures memory.devices and keyboards.b$.$ South Korea Division$-$assembles.desktop computers using internally manufactured parts and memory devices and keyboards from the China Divisionc. U$.$S$.$ Division$-$packages and distributes desktop computersEach division is run as a profit center. The costs for the work done in each division for a single desktop computer are as follows:China DivisionSouth Korea DivisionU.S$.$ DivisionVariable cost $=1,000$ yuanFixed cost $=1,800$ yuanVariable cost $=360,000$ wonFixed cost $=480,000$ wonVariable cost $=$ $$100$Fixed cost $=$ $$200$: South Korean inceme tax fate on South Korea Divsions operating income $20\%$ U$.$S$.$ income tax rate on U$.$S$.$ Division's operating income: $30\%$Each desktop computer is sold to retail outlets in the United States for $$3,200.$ Assume that the current foreign exchange rates are:$8$ yuan $=$ $$1$ U$.$S$\mathrm{.}1,200$ won $=$ $$1$ U$.$S$.$Both the China and the South Korea divisions sell part of their production under a private label. The China Division sells the comparable memory$/$keyboard package used in each User Friendly desktop computer to a Chinese manufacturer for $3,600$ yuan. The South Korea Division sells the comparable desktop computer to a South Korean distributor for $1,560,000$ won$\mathrm{.}1.$ Calculate the after$-$tax operating income per unit earned by each division under the following transfer. pricing methods: $($a$)$ market price, $($b$)200\%$ of full cost, and $($c$)300\%$ of variable cost. $($Income taxes are not included in the computation of the cost$-$based transfer prices.$)2.$ Which transfer$-$pricing method$($s$)$ will maximize the after$-$tax operating income per unit of User Friendly Computer?