Homework Help is Here – Start Your Trial Now!
Business
Accounting
Farleigh Petroleum, Inc., is a small company that acquires high-grade crude oil from low-volume production wells owned by individuals and small partnerships. The crude oil is processed in a single refinery into Two Oil, Six Oil, and impure distillates. Farleigh Petroleum does not have the technology or capacity to process these products further and sells most of its output each month to major refineries. There were no beginning finished goods or work-in-process inventories on April 1. The production costs and output of Farleigh Petroleum for April are as follows: Crude oil placed into production Direct labor and related costs Manufacturing overhead Data on barrels produced and selling price: $6,400,000 1,500,000 3,000,000 Two Oil, 300,000 barrels produced; sales price, $45 per barrel Six Oil, 180,000 barrels produced; sales price, $25 per barrel Distillates, 90,000 barrels produced; sales price, $14 per barrel Required: 1. Calculate the amount of joint production cost that Farleigh Petroleum would allocate to each of the three joint products by using the physical units method. (Carry out the ratio calculation to four decimal places. Round allocated costs to the nearest dollar.) Allocated Joint Cost Two Oil Six Oil Distillates Total 5,736,670 3,442,220 1,721,110 10,900,000 ✓

Farleigh Petroleum, Inc., is a small company that acquires high-grade crude oil from low-volume production wells owned by individuals and small partnerships. The crude oil is processed in a single refinery into Two Oil, Six Oil, and impure distillates. Farleigh Petroleum does not have the technology or capacity to process these products further and sells most of its output each month to major refineries. There were no beginning finished goods or work-in-process inventories on April 1. The production costs and output of Farleigh Petroleum for April are as follows: Crude oil placed into production Direct labor and related costs Manufacturing overhead Data on barrels produced and selling price: $6,400,000 1,500,000 3,000,000 Two Oil, 300,000 barrels produced; sales price, $45 per barrel Six Oil, 180,000 barrels produced; sales price, $25 per barrel Distillates, 90,000 barrels produced; sales price, $14 per barrel Required: 1. Calculate the amount of joint production cost that Farleigh Petroleum would allocate to each of the three joint products by using the physical units method. (Carry out the ratio calculation to four decimal places. Round allocated costs to the nearest dollar.) Allocated Joint Cost Two Oil Six Oil Distillates Total 5,736,670 3,442,220 1,721,110 10,900,000 ✓

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter13: Emerging Topics In Managerial Accounting
Section: Chapter Questions
Problem 48E
See similar textbooks
icon
Related questions
Question

Please provide  detailed solution and give thr explanation of the concept

Farleigh Petroleum, Inc., is a small company that acquires high-grade crude oil from low-volume production wells owned by individuals and small partnerships. The crude oil is processed in a single refinery into Two Oil, Six Oil, and impure distillates. Farleigh Petroleum does not have the technology or capacity to process these products further and sells most of its output each month to major refineries. There were no beginning finished goods or work-in-process inventories on April 1. The production costs and output of Farleigh Petroleum for April are as follows: Crude oil placed into production Direct labor and related costs Manufacturing overhead Data on barrels produced and selling price: $6,400,000 1,500,000 3,000,000 Two Oil, 300,000 barrels produced; sales price, $45 per barrel Six Oil, 180,000 barrels produced; sales price, $25 per barrel Distillates, 90,000 barrels produced; sales price, $14 per barrel Required: 1. Calculate the amount of joint production cost that Farleigh Petroleum would allocate to each of the three joint products by using the physical units method. (Carry out the ratio calculation to four decimal places. Round allocated costs to the nearest dollar.) Allocated Joint Cost Two Oil Six Oil Distillates Total 5,736,670 3,442,220 1,721,110 10,900,000 ✓
Transcribed Image Text:Farleigh Petroleum, Inc., is a small company that acquires high-grade crude oil from low-volume production wells owned by individuals and small partnerships. The crude oil is processed in a single refinery into Two Oil, Six Oil, and impure distillates. Farleigh Petroleum does not have the technology or capacity to process these products further and sells most of its output each month to major refineries. There were no beginning finished goods or work-in-process inventories on April 1. The production costs and output of Farleigh Petroleum for April are as follows: Crude oil placed into production Direct labor and related costs Manufacturing overhead Data on barrels produced and selling price: $6,400,000 1,500,000 3,000,000 Two Oil, 300,000 barrels produced; sales price, $45 per barrel Six Oil, 180,000 barrels produced; sales price, $25 per barrel Distillates, 90,000 barrels produced; sales price, $14 per barrel Required: 1. Calculate the amount of joint production cost that Farleigh Petroleum would allocate to each of the three joint products by using the physical units method. (Carry out the ratio calculation to four decimal places. Round allocated costs to the nearest dollar.) Allocated Joint Cost Two Oil Six Oil Distillates Total 5,736,670 3,442,220 1,721,110 10,900,000 ✓
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS