What is the transfer price per barrel from the Extraction Division to the Refining Division? A. $21.60 B. $56.00 C. $18.00 D. $100.80 Final answer: The transfer price per barrel from the Extraction Division to the Refining Division of Axelia Corporation is $21.60, which represents 120% of the full cost of $18 per barrel from the Extraction Division. The student's question is about calculating the transfer price per barrel from the Extraction Division to the Refining Division of Axelia Corporation, with the stipulation that this price should be set at 120% of full costs. To find the full cost per barrel, we sum up the variable costs and fixed costs for the Extraction Division. In this case, the variable cost is $10 and the fixed cost is $8, giving us a full cost of $18 per barrel. Now, to compute the transfer price, we take 120% of the full cost, which is 1.2 × $18, resulting in a transfer price of $21.60. By setting the transfer price at 120% of the full cost, Axelia Corporation ensures that both divisions benefit from the transaction while maintaining a fair value for each barrel of oil exchanged.

Question

What is the transfer price per barrel from the Extraction Division to the Refining Division? A. $21.60  B. $56.00  C. $18.00  D. $100.80   Final answer: The transfer price per barrel from the Extraction Division to the Refining Division of Axelia Corporation is $21.60, which represents 120% of the full cost of $18 per barrel from the Extraction Division.   The student's question is about calculating the transfer price per barrel from the Extraction Division to the Refining Division of Axelia Corporation, with the stipulation that this price should be set at 120% of full costs.  To find the full cost per barrel, we sum up the variable costs and fixed costs for the Extraction Division. In this case, the variable cost is $10 and the fixed cost is $8, giving us a full cost of $18 per barrel.  Now, to compute the transfer price, we take 120% of the full cost, which is 1.2 × $18, resulting in a transfer price of $21.60.  By setting the transfer price at 120% of the full cost, Axelia Corporation ensures that both divisions benefit from the transaction while maintaining a fair value for each barrel of oil exchanged.

Isobel · Answer

Final answer: The transfer price per barrel from the Extraction Division to the Refining Division of Axelia Corporation is $21.60, which represents 120% of the full cost of $18 per barrel from the Extraction Division.   The student's question is about calculating the transfer price per barrel from the Extraction Division to the Refining Division of Axelia Corporation, with the stipulation that this price should be set at 120% of full costs.  To find the full cost per barrel, we sum up the variable costs and fixed costs for the Extraction Division. In this case, the variable cost is $10 and the fixed cost is $8, giving us a full cost of $18 per barrel.  Now, to compute the transfer price, we take 120% of the full cost, which is 1.2 × $18, resulting in a transfer price of $21.60.  By setting the transfer price at 120% of the full cost, Axelia Corporation ensures that both divisions benefit from the transaction while maintaining a fair value for each barrel of oil exchanged.

Calculating Transfer Price at Axelia Corporation

What is the transfer price per barrel from the Extraction Division to the Refining Division?

Final answer:

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