Answer the Following Questions Using the Information Below:
the Betashoe

question 122

Multiple Choice

Answer the following questions using the information below:
The Betashoe Company manufactures shoes.It has two divisions: the Sole Division and the Assembly Division.The Sole Division manufactures soles for the Assembly Division,which completes the manufacturing of the shoes and sells the completed product to retailers.The Sole Division 'sells' pairs of soles to the Assembly Division.The market price for the Assembly Division to purchase a pair of soles is $20.(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 $7 per pair of shoes at 100 000 units.
Costs per pair of soles are:
$\begin{array}{ll}\text { Direct materials } & \$ 4 \\\text { Direct labour } & \$ 3 \\\text { Variable overhead } & \$ 2 \\\text { Division fixed costs } & \$ 1\end{array}$

Assembly's costs per completed pair of shoes are:
$\begin{array} { l l } \text { Direct materials } & \$ 6 \\ \text { Direct labour } & \$ 2 \\ \text { Variable overhead } & \$ 1 \\ \text { Division fixed costs } & \$ 7 \end{array}$
-If the method used to place a value on each pair of soles is 180% of variable costs,what is the transfer price per pair of soles from the Sole Division to the Assembly Division?

• A)$12.60
• B)$28.80
• C)$16.20
• D)$14.40

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Definitions:

Glucose

A fundamental sugar crucial for energy provision in living entities and a constituent of various carbohydrates.

Amylase

An enzyme that helps in the digestion of carbohydrates by breaking down starches into simpler sugars.

Lipids

A class of organic compounds that are fatty acids or their derivatives and are insoluble in water but soluble in organic solvents. They serve as a major energy store and play roles in cell membrane structure.

Uvula

The uvula is the small, fleshy, conical mass that hangs from the posterior edge of the middle of the soft palate, visible when one opens the mouth widely.