Axelia Corporation has two divisions, Refining and Extraction. The company's primary product is Luboil Oil. Each division's

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Axelia Corporation has two divisions, Refining and Extraction. The company's primary product is Luboil Oil. Each division's costs are provided below: Extraction: Variable costs per barrel of oil Fixed costs per barrel of Refining: Variable costs per barrel of oil Fixed costs per barrel of $ 7 $ 5 $ 28 $ 32 The Refining Division has been operating at a capacity of 40,000 barrels a day and usually purchases 25,000 barrels of oil from the Extraction Division and 15,000 barrels from other suppliers at $60 per barrel.

1) What is the transfer price per barrel from the Extraction Division to the Refining Division, assuming the method used to place a value on each barrel of oil is 110% of full costs?

A) $79.00

B) $44.00

C) $12.00

D) $13.20

2) Assume 200 barrels are transferred from the Extraction Division to the Refining Division for a transfer price of $18 per barrel. The Refining Division sells the 200 barrels at a price of $120 each to customers. What is the operating income of both divisions together?

A) $7,200

B) $20,400

C) $9,600

D) $10,800

3) What is the transfer price per barrel from the Extraction Division to the Refining Division, assuming the method used to place a value on each barrel of oil is 180% of variable costs?

A) $72.00

B) $21.60

C) $12.60

D) $130.0