Answer the Following Questions Using the Information Below:
Branded Shoe

question 69

Multiple Choice

Answer the following questions using the information below:
Branded Shoe Company manufactures only one type of shoe and has two divisions, the Stitching Division and the Polishing Division. The Stitching Division manufactures shoes for the Polishing Division, which completes the shoe and sells it to retailers. The Stitching Division "sells"shoes to the Polishing Division. The market price for the Polishing Division to purchase a pair of shoes is $42. (Ignore changes in inventory.) The fixed costs for the Stitching Division are assumed to be the same over the range of 40,000-100,000 units. The fixed costs for the Polishing Division are assumed to be $14 per pair at 100,000 units.
Stitching's costs per pair of soles are:
$\begin{array} { l l } \text { Direct materials } & \$ 10 \\ \text { Direct labor } & \$ 8 \\ \text { Variable overhead } & \$ 6 \\ \text { Division fixed costs } & \$ 4 \end{array}$
Polishing's costs per completed pair of shoes are:
$\begin{array} { l l } \text { Direct materials } & \$ 14 \\ \text { Direct labor } & \$ 6 \\ \text { Variable overhead } & \$ 4 \\ \text { Division fixed costs } & \$ 16 \end{array}$
-What is the market-based transfer price per pair of shoes from the Stitching Division to the Polishing Division?

• A) $20
• B) $32
• C) $42
• D) $52

Identify and categorize accounts as asset, liability, or equity and their normal balances.

Analyze transactions involving sales tax and determine the correct journal entries.

Distinguish between a discount period and a credit period and their impact on cash flow and sales revenue.

Evaluate the impact of merchandise returns on financial statements.

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Definitions:

Double-Barreled

A question or statement that attempts to address more than one issue, but only allows for one answer, potentially causing confusion or inaccurate responses.

Loaded Question

A question that contains a controversial or unjustified assumption, making it difficult to answer without implicating oneself in some undesirable way.

Extraneous Variable

Any variable that is not intentionally studied within an experiment that can affect the outcome of the research if not controlled.

Dependent Variable

The variable in an experiment that is observed and measured to see how it is affected by the independent variable.