1) Alexia Corporation has two divisions, Refining and Extraction. The company's primary product is Lukoil Oil. Each division's costs are provided below: Extraction: Variable costs per barrel of oil $10 Fixed costs per barrel of oil Refining: Variable costs per barrel of oil $7 $26 Fixed costs per barrel of oil $37 The Refining Division has been operating at a capacity of 40,000 barrels a day and usually purchases 26,000 barrels of oil from the Extraction Division and 15,300 barrels from other suppliers at $63 per barrel. Compute 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 175% of variable costs. 2) Alexia Corporation has two divisions, Refining and Extraction. The company's primary product is Lukoil Oil. Each division's costs are provided below: Extraction: Variable costs per barrel of oil $13 Fixed costs per barrel of oil $6 Refining: Variable costs per barrel of oil $26 Fixed costs per barrel of oil $36 The Refining Division has been operating at a capacity of 40,800 barrels a day and usually purchases 25,600 barrels of oil from the Extraction Division and 15,100 barrels from other suppliers at $62 per barrel. Compute 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 110% of full costs. 3) Alexia Corporation has two divisions, Refining and Extraction. The company's primary product is Lukoil Oil. Each division's costs are provided below: Extraction: Variable costs per barrel of oil $15 Fixed costs per barrel of oil Refining: Variable costs per barrel of oil $12 $26 Fixed costs per barrel of oil $40 The Refining Division has been operating at a capacity of 40,900 barrels a day and usually purchases 25,300 barrels of oil from the Extraction Division and 15,300 barrels from other suppliers at $66 per barrel. Assume 300 barrels are transferred from the Extraction Division to the Refining Division for a transfer price of $18 per barrel. The Refining Division sells the 300 barrels at a price of $180 each to customers. Compute the operating income of both divisions together.