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

1) 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 $10 Fixed costs per barrel of oil $8 Refining: Variable costs per barrel of oil $26 Fixed costs per barrel of oil $38 The Refining Division has been operating at a capacity of 40,300 barrels a day and usually purchases 25,400 barrels of oil from the Extraction Division and 15,100 barrels from other suppliers at $64 per barrel. 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 130% of full costs?

a) 23.40

b) 21.60

c) 83.20

d) 13.00

e) 10.40

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