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 per unit fixed costs are based on a production of 60,000 pairs of shoes.Sole's costs per pair of soles are:
Assembly's costs per completed pair of shoes are:

-What is the transfer price per pair of shoes from the Sole Division to the Assembly Division if the transfer price per pair of soles is 125% of full costs?
A)$10.00
B)$12.50
C)$11.25
D)$20.00
E)$8.75

Question

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 per unit fixed costs are based on a production of 60,000 pairs of shoes.Sole's costs per pair of soles are:
  Assembly's costs per completed pair of shoes are:
 
-What is the transfer price per pair of shoes from the Sole Division to the Assembly Division if the transfer price per pair of soles is 125% of full costs?
A)$10.00 
B)$12.50 
C)$11.25 
D)$20.00 
E)$8.75

Quizplus · Accepted Answer

The transfer price per pair of shoes from the Sole Division to the Assembly Division is 125% of full costs. The full cost of a pair of soles is $10.00. Therefore, the transfer price per pair of shoes is $10.00 x 125% = $12.50.

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