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Hi, how to solve this question please? The Northern Oil Company buys crude vegetable oil. Refining this oil results in four products at the splitoff
Hi, how to solve this question please?
The Northern Oil Company buys crude vegetable oil. Refining this oil results in four products at the splitoff point: A, B, C, and D. Product C is fully processed by the splitoff point. Products A, B, and D can individually be further refined into Super A, Super B, and Super D. In the most recent month (December), the output at the splitoff point is shown in the table provided. (Click to view the December information.) Required 1. Compute the gross margin percentage for each product sold in December, using the following methods for allocating the $125,000 joint costs: a. Sales value at splitoff b. Physical-measure c. NRV 2. Could Northern have increased its December operating income by making different decisions about the further processing of products A, B, or D? Show the effect on operating income of any changes you recommend. Requirement 1. Compute the gross margin percentage for each product sold in December, using the different methods for allocating the $125,000 joint costs. a. Sales Value at Splitoff. Begin by entering the amounts in the table and allocate the joint costs. (Enter the weightings to four decimal places. Round your answers to the nearest whole dollar.) Compute the gross margin percentage using the sales value at splitoff method to allocate the joint costs. (Enter an amount in each input cell. Round dollar amounts to the nearest whole dollar. Round the percentages to two decimal places, X.XX\%. Use parentheses or a minus sign when entering negative amounts.) ercentages to two decimal places, X.XX\%. Use parentheses or a minus sign when entering negative amounts.) percentages to two decimal places, X.XX\%. Use parentheses or a minus sign when entering negative amounts.) whole dollar.) whole dollar.) decimal places, X.XX%. Use parentheses or a minus sign when entering negative amounts.) decimal places, X.XX%. Use parentheses or a minus sign when entering negative amounts.) changes you recommend. minus sign.) Requirement 2. Could Northern have increased its December operating income by making different decisions about the further processing of products A, B, or D? Show the effect on operating income of any changes you recommend. Determine the formula you will use to make your decision. Then enter the amounts for each product and determine the effect on operating income of the decision. (Enter negative effects with parentheses or a minus sign.) Operating income can be increased by if is/are sold at their splitoff point rather than processed further. December information The joint costs of purchasing and processing the crude vegetable oil were $125,000. Northern had no beginning or ending inventories. Sales of product C in December were $50,000. Products A, B, and D were further refined and then sold. Data related to December are: Northern had the option of selling products A, B, and D at the splitoff point. This alternative would have yielded the following revenues for the December production: Product A $50.000 Northern had the option of selling products A, B, and D at the splitoff point. This alternative would have yielded the following revenues for the December productionStep by Step Solution
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