USM, a U.S. manufacturing corporation, sells electrical gizmos to foreign distribution subsidiaries and to unrelated foreign...

USM, a U.S. manufacturing corporation, sells electrical gizmos to foreign distribution subsidiaries and to unrelated foreign distributors. The terms of sale are substantially the same except that the price charged to subsidiaries is a delivered price, while the price charged to unrelated distributors is f.o.b. USM’s factory.

(a) Is the comparable sales method applicable in this case?

(b) Would the result change in part (a) above, if the sole difference was that USM affixes its valuable trademark to electrical gizmos sold to its subsidiaries, but not to unrelated distributors?

(c) Would the result change in part (a) above, if the sole difference was that the subsidiaries resold to European customers while the unrelated distributors sold in Asia?

Expert Solution

ekkarill92 answered 1 year ago

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