Problem $19-52($Algo$)$ Transfer Pricing; Ethics $[$LO $19-4]$

Zen Manufacturing, Incorporated, is a multinational firm with sales and manufacturing centers in $15$ countries. One of its manufacturing

divisions, in country $x,$ sells a product to a retail division in country $Y$ for $$372,000$ per unit. The division in country $x$ has

manufacturing costs of $$195,000$ for this product. The retail division in country $Y$ sells the product to final customers for $$495,000$ per

unit. Zen is considering adjusting its transfer prices to reduce its overall corporate tax liability.

Required:

Assume that both country $x$ and country $Y$ have corporate income tax rates of $40\%$ and that no special tax treaties or benefits apply

to Zen. What would be the effect on Zen's total tax burden if the manufacturing unit raises its price from $$372,000$ to $$446,400?$

What would be the effect on Zen's total taxes if the manufacturing unit raised its price from $$372,000$ to $$446,400$ and the tax rates

in countries $x$ and $Y$ are $20\%$ and $40\%,$ respectively?

$($For all requirements, leave no cells blank; if there is no effect enter $"0"$ and select $"$No effect" from dropdown.$)$