Molo Oil Company produces gasoline, home heating oil, and jet fuel from crude oil in a...

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Molo Oil Company produces gasoline, home heating oil, and jet fuel from crude oil in a joint processing operation. Joint processing costs up to the split-off point total $325,000 per month. For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Monthly Output 12,000 gallons Product Selling Price Gasoline $15.00 per gallon Heating Oil $ 9.00 per gallon 18,800 gallons Jet Fuel $21.00 per gallon 3,200 gallons Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below: Additional Processing Selling Product Costs Price Gasoline $59,100 $19.60 per gallon Heating $84,230 $14.60 per gallon Oil Jet Fuel $33,280 $28.60 per gallon Required: 1. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? 2. Based on your analysis in requirement 1, which product or products should be sold at the split-off point and which product or products should be processed further? Required 1 Required 2 What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? Home Gasoline Jet Fuel Heating Oil Financial advantage (disadvantage) of further processing Required 1 Required 2 Based on your analysis in requirement 1, which product or products should be sold at the split-off point and which product or products should be processed further? Home Gasoline Jet Fuel Heating Oil Sell at split-off point? Process further? Molo Oil Company produces gasoline, home heating oil, and jet fuel from crude oil in a joint processing operation. Joint processing costs up to the split-off point total $325,000 per month. For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Monthly Output 12,000 gallons Product Selling Price Gasoline $15.00 per gallon Heating Oil $ 9.00 per gallon 18,800 gallons Jet Fuel $21.00 per gallon 3,200 gallons Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below: Additional Processing Selling Product Costs Price Gasoline $59,100 $19.60 per gallon Heating $84,230 $14.60 per gallon Oil Jet Fuel $33,280 $28.60 per gallon Required: 1. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? 2. Based on your analysis in requirement 1, which product or products should be sold at the split-off point and which product or products should be processed further? Required 1 Required 2 What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? Home Gasoline Jet Fuel Heating Oil Financial advantage (disadvantage) of further processing Required 1 Required 2 Based on your analysis in requirement 1, which product or products should be sold at the split-off point and which product or products should be processed further? Home Gasoline Jet Fuel Heating Oil Sell at split-off point? Process further?

Answer rating: 100% (QA)

Req 1 Gasoline Heating Oil Jet Fuel SP after further processing 1960 1460 2860 Less SP at the sp... View the full answer