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skully skully
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7 years ago
Mega Petroleum has two divisions, each operating as a profit center. The transportation division purchases crude oil in Venezuela, and transports it from Venezuela to Chicago, Illinois. The reefing division process crude oil into gasoline. The cost-based transfer price is 106% of full cost. The contract price of $75 per barrel of crude oil is based on market price in Chicago. The market price per barrel of crude oil supplied to the refining division is $90. The managerial accountant reported the following information?

Transportation Division
Variable cost per barrel of crude oil   $2
Fixed cost per barrel of crude oil   $4
Full cost per barrel of crude oil   $6

Refining Division
Variable cost per barrel of gasoline   $9
Fixed cost per barrel of gasoline   $7
Full cost per barrel of gasoline   $16

Required
Compute the cost-based transfer prices at 106% of full cost of the crude oil purchased in Venezuela, plus the transportation division's variable and fixed costs.
A) $80.86
B) $82.86
C) $85.86
D) $87.86
E) $90.86
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Managerial Accounting: Decision Making and Motivating Performance

Managerial Accounting: Decision Making and Motivating Performance


Edition: 1st
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Managerial Accounting: Decision Making and Motivating Performance
University of Pittsburgh
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lordingtonlordington
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skully Author
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#2
7 years ago
You make it look easy lol

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Managerial Accounting: Decision Making and Motivating Performance
University of Pittsburgh
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