Exxon Mobil Corporation is analyzing its cost structure using Standard Cost Accounting:

Requirements:

• Calculate the Standard Cost per barrel of oil:
  • Direct Costs: $40 per barrel
  • Indirect Costs: $20 per barrel

• Implement Activity-Based Costing to allocate exploration and refining costs.
• Apply Marginal Cost Accounting to assess the cost impact of extracting additional barrels.
• Evaluate the benefits of Standard Cost Accounting in cost variance analysis and decision-making.
• Discuss how ABC could enhance cost allocation for environmental compliance activities.

Standard Cost Calculation:

Category	Amount per Barrel ($)
Direct Costs	$40
Indirect Costs	$20
Total Standard Cost per Barrel	$60