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Mega Petroleum has two divisions, each operating as a profit center. The transportation division purchases...

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Accounting

Mega Petroleum has two divisions, each operating as a profit center. The transportation division purchases crude oil in Venezuela, and transports it from Venezuela to Chicago, Illinois. The reefing division process crude oil into gasoline. The cost-based transfer price is 106% of full cost. The contract price of $75 per barrel of crude oil is based on market price in Chicago. The market price per barrel of crude oil supplied to the refining division is $90. The managerial accountant reported the following information?
Transportation Division
Variable cost per barrel of crude oil $2
Fixed cost per barrel of crude oil $4
Full cost per barrel of crude oil $6
Refining Division
Variable cost per barrel of gasoline $9
Fixed cost per barrel of gasoline $7
Full cost per barrel of gasoline $16
Required: Compute the cost-based transfer prices at 106% of full cost of the crude oil purchased in Venezuela, plus the transportation division's variable and fixed costs.

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