EXERCISE 2: Axiom Petroleum operates an oil refining facility that produces three different grades of fuel. Following are the production and sales information for the month of August. Sales Value at Product Gallons Produced lit-off Point $175,000 336,000 rade Regular grade 480,000 460,000 remium grade 384,000 405,000 TOTAL 1,200,000 1,040,000 The Joint Costs of processing for August were $624,000. Determine the amount of joint costs allocated based on the gallons produced Step 1: Compute an allocation rate (Round to two digits beyond the decimal point). Total Joint CostsCost Driver(Allocation BaseAllocation Rate Total Gallons produced per gallorn 3 I Page Step 2: Allocate costs based on gallons produced Gallons Allocation Allocated Rate Low grade gallons Medium grade $ gallons Premium grade $ gallons TOTAL Determine the amount of joint costs allocated based on the relative Sales Value at the split-off point: Step 1: Compute an allocation rate (Round to two digits beyond the decimal point) Cost Driver(Allocation Base) Total Joint Costs Allocation Rate Sales value at Split Off per $ of sales value Step 2: Allocate costs based on gallons produced Allocation Allocated Sales value at Split Off Rate Low grade Medium grade Premium grade TOTAL