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 Split-off Point Gallons Produced Product 175,000 336,000 grade egular grade 480,000 460,000 ium grade 384,000 405,000 OTAL 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 Costs Cost Driver(Allocation BaseAllocation Rate Total Gallons produced per gallon 3I Page Step 2: Allocate costs based on gallons produced: Allocation Gallons Allocated Rate Low grade gallons Medium grade $ gallons Premium grade gallons TOTAL Step 2: Allocate costs based on gallons produced: Allocated Rate Low grade gallons Medium grade $ gallons remium 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 d 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: Sales value at Split off Allocated Rate Low grade Medium grade $ remium grade TOTAL