Mega Petroleum Has Two Divisions,each Operating as a Profit Center

question 51

Multiple Choice

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?

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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Definitions:

Self-Blame

The act of attributing personal failures or negative events to one's own deficiencies or actions.

Coping Strategy

A method or technique used to manage or overcome demands and conflicts in life.

Repression

The unconscious exclusion of painful impulses, desires, or fears from the conscious mind.

Denial

A psychological defense mechanism where an individual refuses to accept reality or facts, often as a way to protect themselves from uncomfortable feelings.