Exercise:

Boone Oil Co.Transports crude oil to its refinery where it is processed into main products gasoline, kerosene, and diesel fuel, and by-product base oil.The base oil is sold at the split-off point for $500,000 of annual revenue, and the joint processing costs to get the crude oil to split-off are $5,000,000.Additional information includes:

Barrels Cost after Selling Price

Product ProducedSplit-off per Barrel

Gasoline 500,000 $200,000 $ 100

Kerosene 100,000 500,00080

Diesel fuel 250,000 1,000, 60

Required:

Determine the allocation of joint costs using the adjusted sales value method, rounding the sales value percentages to the nearest tenth of a percent.