Question: Carol Components operates a Production Division and a Packaging Division. Both divisions are evaluated as profit centers. Packaging buys components from Production and assembles them

 Carol Components operates a Production Division and a Packaging Division. Both

Carol Components operates a Production Division and a Packaging Division. Both divisions are evaluated as profit centers. Packaging buys components from Production and assembles them for sale. Production sells many components to third parties in addition to Packaging. Selected data from the two operations follow: - For Production, this is the price to third porties. b For Packaging, this does not include the transfer price paid to Production. Suppose Production is located in Country A with a tax rate of 30 percent and Distribution in Country 8 with a tax rate of 10 percent. All other facts remain the same. Requlred: a. Current output in Production is 25,200 units. Packaging requests an additional 5,640 units to produce a special order. What transfer price would you recommend? b. Suppose Production is operating at full capacity. What transfer price would you recommend? c. Suppose Production is operoting at 47,580 units. What transfer price would you recommend

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