Calculate the increase in annual after-tax profits if the higher transfer price of $1,250 per unit is used.

Name: Calculate the increase in annual after-tax profits if the higher transfer price of $1,250 per unit is used.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The increase in annual after-tax profits is $250,000. This is because the higher transfer price of $1,250 per unit will increase the profit margin on each unit sold. The company will sell 1,000 units per year, so the total increase in annual after-tax profits will be $250,000.

Calculate the Increase in Annual After-Tax Profits If the Higher