The joint costs of purchasing and processing the crude vegetable oil were $96,000. South had no beginning or ending inventories. Sales of product C in November were $24,000. Products A, B, and D were further refined and then sold. Data related to November follow: Separable Processing Costs to Make Super Products $ Revenues Super A 249,600 $ 320,000 Super B 102,400 160,000 Super D 152,000 160,000 South had the option of selling products A, B, and D at the splitoff point. This alternative would have yielded the following revenues for the November

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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• Product A, 322,400 gallons
Product B, 119,600 gallons
• Product C, 52,000 gallons
• Product D, 26,000 gallons
The joint costs of purchasing and processing the crude vegetable oil were
$96,000. South had no beginning or ending inventories. Sales of product C
in November were $24,000. Products A, B, and D were further refined and
then sold. Data related to November follow:
Separable Processing Costs to
Make Super Products
$
Revenues
320,000
160,000
160,000
Super A
249,600 $
Super B
102,400
Super D
152,000
South had the option of selling products A, B, and D at the splitoff point. This
alternative would have yielded the following revenues for the November
alternative would have yielded the following revenues for the November
production:
• Product A, $84,000
Product B, $72,000
Product D, $60,000
Show Transcribed Text
Transcribed Image Text:● More info ● • Product A, 322,400 gallons Product B, 119,600 gallons • Product C, 52,000 gallons • Product D, 26,000 gallons The joint costs of purchasing and processing the crude vegetable oil were $96,000. South had no beginning or ending inventories. Sales of product C in November were $24,000. Products A, B, and D were further refined and then sold. Data related to November follow: Separable Processing Costs to Make Super Products $ Revenues 320,000 160,000 160,000 Super A 249,600 $ Super B 102,400 Super D 152,000 South had the option of selling products A, B, and D at the splitoff point. This alternative would have yielded the following revenues for the November alternative would have yielded the following revenues for the November production: • Product A, $84,000 Product B, $72,000 Product D, $60,000 Show Transcribed Text
Requirements
1.
2.
Compute the gross-margin percentage for each product sold in November,
using the following methods for allocating the $96,000 joint costs:
a. Sales value at splitoff
b. Physical measure
C. NRV
Could South Oil have increased its November operating income by making
different decisions about the further processing of products A, B, or D? Show
the effect on operating income of any changes you recommend.
Transcribed Image Text:Requirements 1. 2. Compute the gross-margin percentage for each product sold in November, using the following methods for allocating the $96,000 joint costs: a. Sales value at splitoff b. Physical measure C. NRV Could South Oil have increased its November operating income by making different decisions about the further processing of products A, B, or D? Show the effect on operating income of any changes you recommend.
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