Answer the Following Questions Using the Information Below

question 112

Multiple Choice

Answer the following questions using the information below:
Penn Oil Corporation has two divisions, Refining and Production. The company's primary product is Luboil Oil. Each division's costs are provided below:
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 $60 per barrel.
-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)$16.50
• B)$66.00
• C)$72.60
• D)$89.10

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Definitions:

Complex Tricks

Specialized, often difficult techniques or strategies used to accomplish tasks or solve problems.

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Fixed-ratio Schedule

A schedule of reinforcement where a response is reinforced only after a specified number of responses have occurred, leading to a high, stable responding rate with just a brief pause after the reinforcement.