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Physical Units Method, Relative Sales Value Method 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: $6,600,000 1,400,000 3,000,000 Two Oil, 300,000 barrels produced; sales price, $45 per barrel Six Oil, 170,000 barrels produced; sales price, $25 per barrel Distillates, 80,000 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

Physical Units Method, Relative Sales Value Method 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: $6,600,000 1,400,000 3,000,000 Two Oil, 300,000 barrels produced; sales price, $45 per barrel Six Oil, 170,000 barrels produced; sales price, $25 per barrel Distillates, 80,000 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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Physical Units Method, Relative Sales Value Method 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: 1 Crude oil placed into production Direct labor and related costs Manufacturing overhead Data on barrels produced and selling price: $6,600,000 1,400,000 3,000,000 Two Oil, 300,000 barrels produced; sales price, $45 per barrel. Six Oil, 170,000 barrels produced; sales price, $25 per barrel Distillates, 80,000 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 m Booking.com McAfee Security LastPass password... Amazon.com-Onli. LastPass The Eureka Momen..... D Oth 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 (Note: The total of the allocated costs does not equal due to rounding error.) 2. Calculate the amount of joint production cost that Farleigh Petroleum would allocate to each of the three joint products by using the relative sales value 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
Transcribed Image Text:Physical Units Method, Relative Sales Value Method 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: 1 Crude oil placed into production Direct labor and related costs Manufacturing overhead Data on barrels produced and selling price: $6,600,000 1,400,000 3,000,000 Two Oil, 300,000 barrels produced; sales price, $45 per barrel. Six Oil, 170,000 barrels produced; sales price, $25 per barrel Distillates, 80,000 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 m Booking.com McAfee Security LastPass password... Amazon.com-Onli. LastPass The Eureka Momen..... D Oth 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 (Note: The total of the allocated costs does not equal due to rounding error.) 2. Calculate the amount of joint production cost that Farleigh Petroleum would allocate to each of the three joint products by using the relative sales value 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
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