Allocate joint costs on the basis of physical units. (Obj. 1). The Raif Company produces oil and gas from the same wells. During October 19X9, the total operating costs of a lease were $68,000. Production was 6,000 barrels of oil and 20,000 cubic feet of gas. Each barrel of oil has about 6 times the energy content of a thousand cubic feet (an mcf.) of gas. What total cost should be allocated to the oil produced and to the gas produced if energy content (a physical unit)

is to be used as the basis of the allocation? LO.1