Use the Information Below to Answer the Following Question(s)

question 139

Multiple Choice

Use the information below to answer the following question(s) .Blackoil Corp.has two divisions, Refining and Production.The company's primary product is Clean Oil.Each division's costs are provided below:
The Production Division is able to sell the oil to other areas for $24 per litre.The Refining Division has been operating at a capacity of 80,000 litres a day, using oil from the Production Division and oil purchased from other suppliers.The Refining Division usually purchases 50,000 litres of oil, on average, from the Production Division and 30,000 litres, on average, from other suppliers at $40/litre.
-What is the Refining Division's operating income if 150 litres of oil are sold at $110 /litre and 200 litres are transferred in? Assume the transfer price is based on 175% of variable costs.

• A)$16,500
• B)$15,600
• C)$525
• D)$6,825
• E)$8,500

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Definitions:

Pavlov

A Russian physiologist best known for his work in classical conditioning, particularly through his experiments with dogs.

Conditioned Stimulus

An initial neutral cue that, once linked with an unconditioned stimulus, gradually leads to a conditioned response.

Conditioned Response

A learned response to a previously neutral stimulus that has become conditioned by being paired with an unconditioned stimulus.

Habituation

A psychological learning process wherein there is a decrease in response to a stimulus after being repeatedly exposed to it.