Emmanuella Petroleum has spent $204,000 to refine 62,000 gallons of petroleum distillate, which can be sold for $6.40 per gallon. Alternatively, Emmanuella Petroleum can process the distillate further and produce 56,000 gallons of cleaner fluid. The additional processing wil cost $1.75 per gallon of distillate. The cleaner fluid can be sold for $9.00 per gallon. To sell cleaner fluid, Emmanuella Petroleum must pay a sales commission of $0.13 per gallon and a transportation charge of $0.18 per gallon. Read the requirements.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Fill in the diagram for Emmanuella Petroleum's alternatives

Joint costs
of producing
62,000
gallons of
petroleum
distillate
Cost of
processing
further
Revenues from
selling as is
Revenues from
processing
further
Transcribed Image Text:Joint costs of producing 62,000 gallons of petroleum distillate Cost of processing further Revenues from selling as is Revenues from processing further
Emmanuella Petroleum has spent $204,000 to refine 62,000 gallons of petroleum distillate, which can be sold for $6.40 per gallon. Alternatively, Emmanuella Petroleum can process the distillate further and produce 56,000 gallons of cleaner fluid. The additional processing will
cost $1.75 per gallon of distillate. The cleaner fluid can be sold for $9.00 per gallon. To sell cleaner fluid, Emmanuella Petroleum must pay a sales commission of $0.13 per gallon and a transportation charge of $0.18 per gallon.
Read the requirements.
Transcribed Image Text:Emmanuella Petroleum has spent $204,000 to refine 62,000 gallons of petroleum distillate, which can be sold for $6.40 per gallon. Alternatively, Emmanuella Petroleum can process the distillate further and produce 56,000 gallons of cleaner fluid. The additional processing will cost $1.75 per gallon of distillate. The cleaner fluid can be sold for $9.00 per gallon. To sell cleaner fluid, Emmanuella Petroleum must pay a sales commission of $0.13 per gallon and a transportation charge of $0.18 per gallon. Read the requirements.
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