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| Teaching Since: | Jul 2017 |
| Last Sign in: | 399 Weeks Ago |
| Questions Answered: | 5023 |
| Tutorials Posted: | 5024 |
Akku Company imports die-cast parts from its German subsidiary that are used in the production of childrenâs toys. Per unit, part 169 costs the German subsidiary $1.00 to produce and $0.20 to ship to Akku Company. Akku Company uses part 169 to produce a toy airplane that it sells to U.S. toy stores for $4.50 per unit. The following tax rates apply:  Â
Â
German income tax  . . . . . . . . . . 40%
U.S. income tax . . . . . . . . . . . . . . 35%
U.S. import duty . . . . . . . . . . . . . 1 0% of invoice price
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a)Â Â Â Â Â Determine the total amount of taxes and duties paid to the U.S. and German governments if part 169 is sold to Akku Company at a price of $1.50 per unit.
b)Â Â Â Â Â Determine the total amount of taxes and duties paid to the U.S. and German governments if part 169 is sold to Akku Company at a price of $1.80 per unit
c)Â Â Â Â Â Â Explain why the results obtained in parts (a) and (b) differ.
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