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Jets Corporation produces two products from crude oil (fuel and oil} from a joint process. Each product may be sold at the splitoff point or

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Jets Corporation produces two products from crude oil (fuel and oil} from a joint process. Each product may be sold at the splitoff point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely 1ranable and traceable to the products inyolyed. Joint manufacturing costs for the year were $63,ddd_ Sales 1uralues and costs were as follows: If Processed Further Product Units Sales Price Sales Value Separable lCost Made at Split-Off sooo $ 451ooo s espoo s 1o,eoo \" sooo so1ooo too,ooo T,5oo Required: a. If the joint production costs are allocated based on the relativesalesyalue method, what amount of joint cost would be assigned to the Fuel'? b. If both products are processed beyond the splitoff point, what amount of joint cost {rounded to the nearest dollar] would be allocated to the Fuel based on the relatiye sales-value method? c. Which option is more protable in the case of Fuel? Show calculations for both options. Jets Corporation is also developing overhead rates based on direct labour hours for its two production departments, Mixing and Packaging. The Mixing Department employs 50 people and the Packaging Department employs 30 people. Each person in these two departments works 2,000 hours per 1pear. The production related overhead costs for the Mixing Department are budgeted at $300,000, and the Packaging Department costs are budgeted at $500,000. Two service departments, Maintenance and Computing, directlyr support the two production departments. These service departments have budgeted costs of $50,000 and $200,000, respectively. The production departments' overhead rates cannot be determined until the service departments' costs are allocated. The following schedule reflects the use of the Maintenance Department's and Computing Department's output by the various departments. Using Departments Maintenance 1,000 1,000 8,000 {maintenance hours} computing {minutes} 24o,ooo . sadooo \"120,000 Required: Service Department d. Use the direct method to allocate service department costs {round to the nearest dollar}. Calculate the overhead rates per direct labour hour for the Mixing Department and Packaging Department [round to two decimal places]. e. Use the step-down method to allocate service department costs [round to the nearest dollar}. Calculate the overhead rates per direct labour hour for the Mixing Department and Packaging Department [round to two decimal places]

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