The managerial accountant at Mega Petroleum reported the following information.Recall that 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.The market price per barrel of gasoline sold to external parties is $180.

Required
Compute Mega Petroleum's total operating income from purchasing,transporting,and refining 100 barrels of crude oil and selling the 50 barrels of gasoline.

Question

The managerial accountant at Mega Petroleum reported the following information.Recall that 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.The market price per barrel of gasoline sold to external parties is $180.

Required
Compute Mega Petroleum's total operating income from purchasing,transporting,and refining 100 barrels of crude oil and selling the 50 barrels of gasoline.

Quizplus · Accepted Answer

E)50 barrels of gasoline [(180 × 50)- ($75 × 100)- ($6 × 100)- ($16 × 50)]
= [($9,000 - $7,500 - $600 - $800)]
= $100

The Managerial Accountant at Mega Petroleum Reported the Following Information