Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / Transfer price Dakoil Corporation has two divisions, Refining and Production The company’s...

Transfer price Dakoil Corporation has two divisions, Refining and Production The company’s primary p

Transfer price

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 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?

 

 

Apr 24 2020 View more View Less

Answer (Solved)

question Subscribe To Get Solution

Related Questions