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

question 21

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.
-Division A sells soybean paste internally to Division B, which, in turn, produces soybean burgers that sell for $5 per kilogram. Division A incurs costs of $0.75 per kilogram, while Division B incurs additional costs of $2.50 per kilogram. What is Division A's operating income per kilogram assuming the transfer price of the soybean paste is set at $1.25 per kilogram?

• A) $0.500
• B) $0.875
• C) $1.250
• D) $1.625
• E) $1.525

---

Definitions:

High Performers

Employees or individuals who consistently exceed the standard expectations and objectives of their roles.

Stability

In a business context, refers to the consistency, reliability, and predictability of a company's financial status, growth, and operational processes over time.

Cash Cows

Business units or products that generate significant cash flows with minimal investment, often funding other strategic business units.

Modest Growth

An economic situation characterized by slow but steady increase in the size or value of something.