Toil & Oil processes crude oil to jointly produce gasoline, diesel, and kerosene. One batch produces 3,415 gallons of gasoline, 2,732 gallons of diesel, and 1,366 gallons of kerosene at a joint cost of $12,000. After the split-off point, all products are processed further, but the estimated market price for each product at the split-off point is as follows: Gasoline $2 per gallon Diesel 1 per gallon Kerosene 3 per gallon Using the market value at split-off method, allocate the $12,000 joint cost of production to each product
Toil & Oil processes crude oil to jointly produce gasoline, diesel, and kerosene. One batch produces 3,415 gallons of gasoline, 2,732 gallons of diesel, and 1,366 gallons of kerosene at a joint cost of $12,000. After the split-off point, all products are processed further, but the estimated market price for each product at the split-off point is as follows: Gasoline $2 per gallon Diesel 1 per gallon Kerosene 3 per gallon Using the market value at split-off method, allocate the $12,000 joint cost of production to each product
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Toil & Oil processes crude oil to jointly produce gasoline, diesel, and kerosene. One batch produces 3,415 gallons of gasoline, 2,732 gallons of diesel, and 1,366 gallons of kerosene at a joint cost of $12,000. After the split-off point, all products are processed further, but the estimated market price for each product at the split-off point is as follows:
| Gasoline | $2 per gallon |
| Diesel | 1 per gallon |
| Kerosene | 3 per gallon |
Using the market value at split-off method, allocate the $12,000 joint cost of production to each product
Transcribed Image Text:Toil & Oil processes crude oil to jointly produce gasoline, diesel, and kerosene. One batch produces 3,415 gallons of gasoline, 2,732 gallons of diesel, and 1,366 gallons of kerosene at a
joint cost of $12,000. After the split-off point, all products are processed further, but the estimated market price for each product at the split-off point is as follows:
Gasoline
Diesel
Kerosene
$2 per gallon
1 per gallon
3 per gallon
Using the market value at split-off method, allocate the $12,000 joint cost of production to each product.
Joint Product
Allocation
Gasoline
Diesel
Kerosene
Totals
6,000 ✔
2,000 X
4,000 X
12,000 ✓
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