Answer the Following Question(s)using the Information Below

question 11

Multiple Choice

Answer the following question(s) using the information below.
Beta Shoe Ltd.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 $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 at 100,000 units.
Sole's costs per pair of soles are:
Assembly's costs per completed pair of shoes are:

-If the Assembly Division sells 100,000 pairs of shoes at a price of $60 a pair to customers,what is the company's operating income?

• A)$4,400,000
• B)$3,400,000
• C)$3,000,000
• D)$2,600,000
• E)$2,400,000

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Definitions:

Seller/Lessor in Breach

Refers to a situation where the seller or lessor fails to fulfill their contractual obligations, giving the buyer or lessee potential remedies under the law.

Deduction in Damages

A concept in legal disputes where the amount of compensation awarded is reduced due to certain factors, such as contributory negligence or mitigation of loss.

Delivery Expenses

Costs associated with the process of transporting goods from the seller to the purchaser.

Collective Intelligence

The shared or group intelligence that emerges from the collaboration, collective efforts, and competition of many individuals.