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

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Definitions:

Hardworking

Showing diligence and effort in carrying out tasks or duties, often leading to successful outcomes or high productivity.

Principle-implementation Gap

The discrepancy between the adoption of formal policies or principles and their actual, practical application or execution.

Gerrymandering

The practice of manipulating the boundaries of electoral constituencies to favor one party or class.

Threat Hypothesis

A theory suggesting that prejudice, discrimination, and intergroup hostility increase in situations of economic, political, or social competition and perceived threat.