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and 19 Homework (Managerial) Saved Zen Manufacturing Inc. is a multinational firm with sales and manufacturing units in 15 co
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Answer #1
Zen
X Y Total
Selling Price         332,000         470,000
Cost         170,000         332,000
Profit         162,000         138,000
Tax Rate 40% 40%
Tax Liability           64,800           55,200        120,000
After raising price
X Y Total
Selling Price         398,400         470,000
Cost         170,000         398,400
Profit         228,400           71,600
Tax Rate 40% 40%
Tax Liability           91,360           28,640        120,000
No effect as tax rates are same
2.
Original
X Y Total
Selling Price         332,000         470,000
Cost         170,000         332,000
Profit         162,000         138,000
Tax Rate 20% 40%
Tax Liability           32,400           55,200           87,600
After raising price
X Y Total
Selling Price         398,400         470,000
Cost         170,000         398,400
Profit         228,400           71,600
Tax Rate 20% 40%
Tax Liability           45,680           28,640           74,320
Decrease in tax liability by 13,280
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