Multiple Choice
Axelia Corporation has two divisions,Refining and Extraction.The company's primary product is Luboil Oil.Each division's costs are provided below:
The Refining Division has been operating at a capacity of 40,900 barrels a day and usually purchases 25,600 barrels of oil from the Extraction Division and 15,400 barrels from other suppliers at $64 per barrel.
Assume 260 barrels are transferred from the Extraction Division to the Refining Division for a transfer price of $26 per barrel.The Refining Division sells the 260 barrels at a price of $220 each to customers.What is the operating income of both divisions together?
A) $13,520
B) $34,060
C) $16,380
D) $50,440
Correct Answer:
Verified
Correct Answer:
Verified
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