Exxon Mobil Corporation processes crude oil into various refined products. In August 2035, the company processes 120,000 barrels of crude oil costing $6,000,000. The production yields gasoline, diesel, and lubricants as by-products:

• Gasoline: 80,000 barrels
• Diesel: 30,000 barrels
• Lubricants: 10,000 barrels

Required:

• Allocate joint costs using the sales value at split-off method.
• Determine the cost per equivalent unit for gasoline, diesel, and lubricants.
• Allocate joint costs using the physical units method.
• Prepare a cost reconciliation statement showing the allocation of joint costs to main and by-products.
• Calculate the gross profit for each product line.