Gage corporation has two operating divisions in a semiautonomous organizational structure. adams division, located in the united states, produces a specialized electrical component that is an input to bute division, located in the south of england. adams uses idle capacity to produce the component, which has a domestic market price of $11. its variable costs are $6 per unit. gage’s u. s. tax rate is 40 percent of income. in addition to the transfer price for each component received from adams, bute pays a $4 per unit shipping fee. the component becomes a part of its assembled product, which costs an additional $2 to produce and sells for an equivalent of $22. bute could purchase the component from a manchester (england) supplier for $11 per unit. gage’s english tax rate is 60 percent of income. assume that english tax laws permit transferring at either variable cost or market price.

requirements:

a-1. what are the respective profits after tax for both the adams division and bute division of gage if the transfer price is $6. (round your answers to 2 decimal places.)

a-2. what are the respective profits after tax for both the adams division and bute division of gage if the transfer price is $11. (round your answers to 2 decimal places.)

a-3. what transfer price is economically optimal for gage corporation? option 1: the transfer price economically optimal for gage corporation is $6 per unit. option 2: the transfer price economically optimal for gage corporation is $11 per unit.

Prior to its closing, income summary had total debits of $1,190,500 and total credits of $1,476,300. what purpose is served by the income summary account and what is the nature of the entries that resulted in the $1,190,500 and the $1,476,300? the income summary account is used to the accounts. the $1,190,500 represents the , and the $1,476,300 represents . the company had of $ .

Onsider the following subscription behavior information from genie, a web site that provides tools for constructing a family tree (ancestor search). subscriptions cost $9.99 per month, but you are charged for the entire year at the time of purchase. there is a one-year minimum term when you sign up for the service. once purchased, subscriptions are set to renew automatically unless the subscriber cancels them. when a membership renews, it renews for a one-year term and again you are charged for the entire year. there are no variable costs associated with providing this service to an individual customer, but genie does engage in customer relationship activities that they believe will increase customer retention. these customer relationship activities cost genie about $10 per year per customer. based on a sample of 1000 customers that joined genie five years ago, near the time when the company was founded, they were able to determine how many of those customers remained subscribers in the second year, third year etc. based on this information, genie calculated the average annual retention rate to be 20%. genie uses an annual discount rate of 8%. a. last year, genie spent $10,000 placing advertisements on google. genie management believes that these advertisements were responsible for about 300 new subscribers. would you recommend to genie management that they purchase more google ads? b. suppose a newly-introduced loyalty program increases the number of customers that remained to 30%. does this new data change your answer to 9.a? c. do you have any hesitations or concerns about making recommendations to management based on your above estimate of customer lifetime value?

Which of the following constitute the types of unemployment occurring at the natural rate of unemployment? a. frictional and cyclical unemployment.b. structural and frictional unemployment.c. cyclical and structural unemployment.d. frictional, structural, and cyclical unemployment.