Answer the Following Questions Using the Information Below

question 14

Multiple Choice

Answer the following questions using the information below:
Calculate the Division operating income for the AlphaShoe Company which manufactures only one type of shoe and has two divisions, the Sole Division, and the Assembly Division. The Sole Division manufactures soles for the Assembly Division, which completes the shoe and sells it to retailers. The Sole Division "sells" soles to the Assembly Division. The market price for the Assembly Division to purchase a pair of soles is $40. (Ignore changes in inventory.) The fixed costs for the Sole Division are assumed to be the same over the range of 40,000-100,000 units. The fixed costs for the Assembly Division are assumed to be $14 per pair at 100,000 units.

-What is the market-based transfer price per pair of soles from the Sole Division to the Assembly Division?

• A)$20
• B)$32
• C)$40
• D)$52

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Definitions:

Bourgeoisie

The class in capitalist societies that owns the means of production and employs wage labor, historically associated with wealth and societal power.

Capitalist System

An economic system where trade, industry, and the means of production are largely or entirely owned and operated by private individuals or companies for profit.

Sociological Perspective

A viewpoint in sociology that emphasizes looking beyond individual behavior to the wider societal contexts that shape actions and attitudes.

Societal Patterns

The recurring behaviors, traditions, and norms observed within a society.