22. Beta Corporation has two divisions, Refining and Extraction. The company's primary product is Lubbs 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 40,900 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.

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 120% of full costs?

a. $18.00

b. $21.60

c. $36.00

d. $82.00

e. None of the answers.

Please explain the answer