Question: Sony evaluates transfer pricing: Division A (Cost $100/unit), Division B (Market price $120/unit), transfer price $110/unit. Requirements: Calculate the impact on Division As profitability. Calculate

  1. Sony evaluates transfer pricing: Division A (Cost $100/unit), Division B (Market price $120/unit), transfer price $110/unit.
    • Requirements:
      • Calculate the impact on Division A’s profitability.
      • Calculate the impact on Division B’s profitability.
      • Prepare a transfer pricing policy recommendation.
      • Discuss tax implications and compliance issues related to transfer pricing.

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