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Use the following information to answer Questions 4 through 6. Shoe Style sells imitation designer shoes. It practices just-in-time inventory and holds zero inventory. It

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Use the following information to answer Questions 4 through 6. Shoe Style sells imitation designer shoes. It practices just-in-time inventory and holds zero inventory. It expects the current fiscal year to have the same costs, selling prices, demand and production as last fiscal year. The company reported the following information for its last fiscal year. Units produced and sold 12,000 pairs Selling price $42 per pair Per pair cost (based on actual production) Direct materials $10.00 Direct labor $8.00 Variable manufacturing overhead $2.00 Variable selling expenses $7.00 Total fixed manufacturing overhead $57,000 Total fixed selling expenses $36,000Refer to the original information and data. Assume that an outside supplier has offered to supply 12,000 pairs of identical quality shoes for Shoe Style. Shoe Style made the following notes about the offer: 0 If Shoe Style purchases the 12,000 pairs of shoes from the outside supplier, it could use the freed-up capacity to produce imitation hand-bags with a prot of $70,000. 0 If Shoe Style accepts the offer from the outside supplier, total xed manufacturing overhead would decrease by $50,000. Compute the maximum price per pair that Shoe Source should be willing to pay the outside supplier. 0 $27.00 0 $30.00 0 $34.75 0 $22.00

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