Determine consolidated profit after tax of afb corporation

Assignment Help Accounting Basics

Reference no: EM132782818

AFB Corporation maintains different related corporations all over the world. One of its divisions is located in Indonesia while the other is in the Philippines.

The Indonesian Division is in need of a part, with part code labelled as "X44", now being produced by the Philippine Division. The Indonesian Division is presently purchasing the said part from a local supplier. Relevant data are as follows:

PHIL Division IND Division Local IND Supplier

Unit sales price P40 P120 P55

Other unit variable production cost 21 3 ?

Shipping costs if the part is shipped 15

Tax rate 40% 20%

Required:

Problem a: Determine the consolidated profit after tax of AFB Corporation based on the following decision alternatives:

1. The transfer price is at market and the shipping cost is shouldered by the selling division.

2. The transfer price is at market and the shipping cost is shouldered by the buying division.

3. The transfer price is at cost and the shipping cost is shouldered by the selling division.

4. The transfer price is at cost and the shipping cost is shouldered by the buying division.

5. The Indonesian Division buys from the local supplier and the Philippine Division sells its produce in the domestic market.

Reference no: EM132782818

Questions Cloud

Explain the concept of team psychological safety : Explain the concept of team psychological safety. Please add references

How does structure influence behavioral changes : How does structure influence behavioral changes and how does the impact of structure on behavior alter your approach to undertaking change?

Calculate the transfer price if is based on standard : Suppose the predetermined fixed-overhead rate in the Frame Division is 125 percent of direct labor cost. Calculate the transfer price if it is based on standard

Organizational culture at vice media : Vice Media-a multimedia conglomerate-built its organizational culture around some features that were attractive to its young employees

Determine consolidated profit after tax of afb corporation : Determine the consolidated profit after tax of AFB Corporation based on the transfer price is at market and the shipping cost is shouldered

What is leadership style : What is your leadership style? Discuss three strategies you will implement to improve your leadership.

Use of personal protective equipment : Reflect on the requirements for the use of personal protective equipment (PPE) in your current workplace or a workplace with which you are familiar.

Determine the roi for manila division : How much is the net advantage (disadvantage) if Pasig Division buys the 5,000 units from Manila Division rather from an outside supplier?

Compute gross profit or loss to be recognized : Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years

User Account

All Pages