What is the transfer price per barrel from the Production Division

What is the transfer price per barrel from the Production Division THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 1 THROUGH 3. Dakoil Corporation has two divisions, Refining and Production. The company’s primary product is Enkoil Oil. Each division’s costs are provided below: Production: Variable costs per barrel of oil $ 3 Fixed costs per barrel of oil $ 2 Refining: Variable costs per barrel of oil $10 Fixed costs per barrel of oil $12 The Refining Division has been operating at a capacity of 40,000 barrels a day and usually purchases 25,000 barrels of oil from the Production Division and 15,000 barrels from other suppliers at $20 per barrel. 1. What is the transfer price per barrel from the Production Division to the Refining Division, assuming the method used to place a value on each barrel of oil is 180% of variable costs? a. $5.40 b. $9.00 c. $18.00 d. $23.40 2. What is the transfer price per barrel from the Production Division to the Refining Division, assuming the method used to place a value on each barrel of oil is 110% of full costs? a. $5.50 b. $22.00 c. $24.20 d. $29.70 3. Assume 200 barrels are transferred from the Production Division to the Refining Division for a transfer price of $6 per barrel. The Refining Division sells the 200 barrels at a price of $40 each to customers. What is the operating income of both divisions together? a. $2,400 b. $2,600 c. $3,600 d. $6,800 Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help