Exxon Mobil Corporation refines petroleum products using process costing. In September 2027, the company incurs joint production costs of $500 million and produces gasoline, diesel, and jet fuel. Gasoline has a sales value of $2 billion, diesel $1.5 billion, and jet fuel $1 billion.

Required:

• Allocate joint production costs using the sales value at split-off method.
• Determine the joint cost allocation per unit for each petroleum product.
• Calculate the gross profit for each product after allocating joint costs.
• Analyze the impact of joint production on product profitability.
• Discuss the challenges and benefits of using process costing in the oil refining industry.