Answer the Following Questions Using the Information Below:
Branded Shoe

question 92

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 transfer price per pair of shoes from the Stitching Division to the Polishing Division if the method used to place a value on each pair of shoes is 180% of variable costs?

• A) $18.00
• B) $32.40
• C) $43.20
• D) $57.60

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Definitions:

Primary Reinforcer

A fundamental stimulus that satisfies basic survival needs and is naturally reinforcing, such as food or water.

Secondary Reinforcer

Also known as a conditioned reinforcer, it is a stimulus that gains its reinforcing power through association with a primary reinforcer.

Operant Conditioning

The process of learning in which the vigor of an action is transformed by applying punishments or reinforcements.

Reinforcers

In operant conditioning, stimuli that increase the frequency of the behavior they follow, either through positive reinforcement (adding a stimulus) or negative reinforcement (removing a stimulus).