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Question
A barrel of crude oil is extracted from shale at a cost of $51, and then transported to and from the refinery at a cost of $6 each direction. Oil is processed three times at the refinery plant, at a cost of $9 each time. What is the profit, in dollars per barrel, if one barrel is sold for $93? (Profit is equal to revenue minus expenses.)
A barrel of crude oil is extracted from shale at a cost of $51, and then transported to and from the refinery at a cost of $6 each direction. Oil is processed three times at the refinery plant, at a cost of $9 each time. What is the profit, in dollars per barrel, if one barrel is sold for $93? (Profit is equal to revenue minus expenses.)
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Solution
The correct option is C 3
Costing in the process of making and transporting oil are:Cost of extraction=$51Cosr of transportation to and from refinery= $(6+6)=12$Cost of processing 3 times at $9 each time =$(3×9)=$27Total Cost=$(51+12+27)= 90$Selling Price=93$Profit=$(93−90)=3$
Costing in the process of making and transporting oil are:
Cost of extraction=$51
Cosr of transportation to and from refinery= $(6+6)=12$
Cost of processing 3 times at $9 each time =$(3×9)=$27
Total Cost=$(51+12+27)= 90$
Selling Price=93$
Profit=$(93−90)=3$
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