Answer with working n calculation. Tq .

3. Until recently, Strike Ltd focused exclusively on making soles for work boots and football boots. It sold these rubber soles to boot manufacturers. Last year the company decided to take advantage of its strong reputation by expanding into the business of making football boots. As a consequence of this expansion, the company is now structured as two independent divisions, the Boot Division and the Sole Division. The Sole Division continues to make rubber soles for both football boots and work boots and sells these soles to other boot manufacturers. The Boot division manufactures leather uppers for football boots and attaches these uppers to rubber soles. During its first year the Boot Division purchased its rubber soles from outside suppliers so as not to disrupt the operations of the Sole Division. Strike management now wants the Sole Division to provide at least some of the soles used by the Boot Division. The table below shows the contribution margin for each division when the Boot Division purchases from an outside supplier Boot Division Sole Division Selling price of football boot Variable cost of making boot (not including sole) 21 Cost of sole purchased from outside suppliers Contribution margin per unit 100 Selling price of sole 28 45 Variable cost per sole 25 30 Contribution margin per unit 7 Required a) What would be a fair transfer price if the Sole Division sold 10,000 soles to the (5 marks) Boot Division assuming it has no spare capacity? b) What would be a fair transfer price if the Sole Division sold 10,000 soles to the (5 marks) Boot Division assuming it does have spare capacity? (Total 10 marks)