Calculate the Division operating income for the Steps Company - which manufactures only one type of shoe and has two divisions - the Parts Division and the Production. Division. The parts division manufactures soles for the Production Division, which completes the shoe and sells it to retailers. The Parts Division "sells" soles to the Production division. The market price for the Production Division to purchase a pair of soles is P20. (Ignore changes in inventory). The fixed costs for the Parts Division are assumed to be the same over the range: 40,000 - 100,000 units. The fixed costs for the Production Division are assumed to be P7 per pair at 100,000 units. Parts' costs per pair of soles are Direct materials P4 Direct labor P3 Variable overhead P2 Division fixed costs P1 Production's costs per completed pair of shoes are: Direct materials PG Direct labor P2 Variable overhead P1 Division fixed costs P7 1. What is the transfer price per pair of soles from the Parts Division to the Production if the method used to place a value on each pair of soles is 180% of variables? a a. P9 c. P16.20 b. P10 d. P18 2. What is the transfer price per pair of shoes from the Parts Division to the Production Division per pair of soles if the transfer price per pair of soles is 125% of full costs? c. P13 b. P12.50 d. P15 3. Calculate the difference in overall corporate net income if the Production Division sells 100,000 pairs of shoes at price per pair of shoes of P60 under Scenario A and Scenario B: Scenario A-transfer price - negotiated P15 per pair of soles Scenario B-transfer price is market price a. P500,000 more under Scenario A b. P500,000 - under Scenario B c. P100,00 under Scenario A d. None of the above a. P10 4. If the transfer price for a pair of soles is 180% of total costs of the Parts department, and 40,000 of soles are produced and transferred to the Production department, the Parts on's operating income is: a. P320,000 C. P400,000 b. P360,000 d. P440,000 5. If the Assembly Division sells 100,000 pairs of shoes at a price of shoes at a price of P60 a pair, what is the net income of both divisibn together: a. P4,400,000 c. P3,000,000 b. P3,400,000 d. P2,600,000