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 $315,000 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 Product Selling Price Gasoline $13.00 per gallon 11,600 gallons Heating $ 7.00 per gallon 18,200 gallons oil Jet Fuel $19.00 per gallon 2,800 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 Costa $54,640 Selling Price Product Gasoline $17.40 per gallon $77,580 $12.40 per gallon Heating 011 Jet Fuel $29,360 $26.40 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? Complete this question by entering your answers in the tabs below. 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 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 $315,000 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 Product Selling Price Gasoline $13.00 per gallon 11,600 gallons Heating $ 7.00 per gallon 18,200 gallons oil Jet Fuel $19.00 per gallon 2,800 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 Costa $54,640 Selling Price Product Gasoline $17.40 per gallon $77,580 $12.40 per gallon Heating 011 Jet Fuel $29,360 $26.40 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? Complete this question by entering your answers in the tabs below. 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

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Ans1 Analysis of PL from further processing Particular ... View the full answer