The XYZ Corporation is anAmerican companythat manufactures the parts needed for

The XYZ Corporation is anAmerican companythat manufactures the parts needed for its products abroad in country M. It assembles them in the U.S. The transfer price is $500 and theexchange rateis 2 units of M-pesos for $1.In April the company will ship 1000 units from country M to the U.S. The plant in country M has variable costs of 650 pesos andfixed costsof 20000 pesos. The processing cost in the U.S. is $10 per unit with fixed operation costs of $1000. The final product can be sold for $750 each. If the tax rate in country M is 20% while in the U.S. it is 40%; what is the profit in each country? What are the combined profits in U.S. dollars for the month? What happens if we change the transfer price to $600? Why?