32 of 40 ( Auola Corporution has turo diviaions, Refining and Extraction. The co

Question

32 of 40 ( Auola Corporution has turo diviaions, Refining and Extraction. The companýs primary produci is Lutbol Ol. Each division's costs am Extraction:. Variable coets per barrel of oil $15 Refining. Varlable costs per barrel of oil $26 The Refining Division has been What is the tranafer prioe per barrel from the Extraction Division to the Reltining Fixed costs per barrel of oil $7 Fxed costs per barrel of ol $36 usualy purchasen 25,800bamels of oil fom the Extracdion Division and 15,400 bares fom othor suppliers at $82 per barel Division, assuming the method used to place a value on each barel of ol is 180% of variabie costs? operating at a capachy of 40,700 barreis a day and O A $3050 O B. $151.20 O c. $84.00

Explanation / Answer

The option D. $27.00 is correct.

Explanation:

The method used to place a value on each barrel of oil is 180% of variable cost.

= Variable Cost *180% = $15 * 180% = $27.00

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