Use the Information Below to Answer the Following Question(s)

question 56

Multiple Choice

Use the information below to answer the following question(s) .Blackoil Corp.has two divisions, Refining and Production.The company's primary product is Clean Oil.Each division's costs are provided below:
The Production Division is able to sell the oil to other areas for $24 per litre.The Refining Division has been operating at a capacity of 80,000 litres a day, using oil from the Production Division and oil purchased from other suppliers.The Refining Division usually purchases 50,000 litres of oil, on average, from the Production Division and 30,000 litres, on average, from other suppliers at $40/litre.
-What is the transfer price per litre from the Production Division to the Refining Division assuming the method is 120% of full costs?

• A)$16.80
• B)$12.00
• C)$9.50
• D)$7.20
• E)$12.50

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Definitions:

Restatement Second Torts

A legal document summarizing the general principles of American tort law, including definitions and conceptual distinctions.

Strictly Liable

A legal term indicating the responsibility for damages or injury, regardless of fault or intent, usually applied in cases involving inherently dangerous or defective products or activities.

Res Ipsa Loquitur

A legal doctrine that allows an inference of negligence to be drawn from the very nature of the accident or injury, in the absence of direct evidence on how any defendant behaved.

Animal Trap

A device designed to capture or kill animals, typically used for hunting, pest control, or wildlife management purposes.