Exxon Mobil Corporation refines petroleum products using process costing. In October 2031, the company incurs costs of $180 million and produces 3 million barrels of refined petroleum. During production, 30,000 barrels of lubricants are recovered as by-products.

Required:

• Allocate joint costs to main and by-products using the net realizable value method.
• Calculate the cost per barrel of refined petroleum.
• Analyze the financial impact of by-products on process costing profitability.
• Prepare a cost allocation report for Exxon Mobil Corporation.
• Discuss the treatment of by-products in process costing.