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Author Question: Axelia Corporation has two divisions, Refining and Extraction. The company's primary product is ... (Read 99 times)

nautica902

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Axelia Corporation has two divisions, Refining and Extraction. The company's primary product is Luboil 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 40,300 barrels a day and usually purchases 25,400 barrels of oil from the Extraction Division and 15,100 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?
◦ $18.00
◦ $21.60
◦ $56.00
◦ $100.80


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Marked as best answer by nautica902 on Mar 6, 2021

Kjones0604

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nautica902

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Reply 2 on: Mar 6, 2021
Excellent


essyface1

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Reply 3 on: Yesterday
Wow, this really help

 

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