Answer the Following Questions Using the Information Below:
Bass Strait

question 106

Multiple Choice

Answer the following questions using the information below:
Bass Strait Oil Corporation has two divisions: Refining and Production.The company's primary product is Enkoil Oil.Each division's costs are provided below:
$$\begin{array} { l l r } \text { Production: } & \text { Variable costs per barrel of oil } & \$ 3 \\& \text { Fixed costs per barrel of oil } & \$ 2 \\\text { Refining: } & \text { Variable costs per barrel of oil } & \$ 10 \\& \quad \text { Fixed costs per barrel of oil } & \$ 12\end{array}$$
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.
-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)$23.40
• C)$9.00
• D)$18.00

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Definitions:

Job Satisfaction

The degree to which an individual feels positively or negatively about a job.

Organisational Loyalty

The level of commitment an individual has towards their organization, often reflecting in their willingness to stay with and support the organization.

Work Commitment

A measure of how much dedication and loyalty an individual has towards their job or profession.

Psychological Contract

The set of expectations held by an individual about working relationships with the organisation.