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 $$6,400,000$

Direct labor and related costs $1,400,000$

Manufacturing overhead $3,000,000$

Data on barrels produced and selling price:

Two Oil, $300,000$ barrels produced; sales price, $$45$ per barrel

Six Oil, $160,000$ barrels produced; sales price, $$25$ per barrel

Distillates, $90,000$ barrels produced; sales price, $$14$ per barrelPhysical Units Method, Relative Sales Value Method

Crude oil placed into production

Direct labor and related costs

Manufacturing overhead

$$6,400,000$

$1,400,000$

$3,000,000$

Data on barrels produced and selling price:

Two Oil, $300,000$ barrels produced; sales price, $$45$ per barrel

Six Oil, $160,000$ barrels produced; sales price, $$25$ per barrel

Distillates, $90,000$ barrels produced; sales price, $$14$ per barrel

Required:

Allocated

Joint Cost

Two Oil

Six Oil

Distillates

Total

s

$($Note: The total of the allocated costs does not equal due to rounding error.$)$