Management Homework: C... Question 14, E16-26 (si... Part 1 of 5 HW Score: 69.32%, 13.86 of 20 points O Points: 0 of 1 Save St Thomas Ol & Gas, a large energy conglomerate, jointly processes purchased hydrocarbons to generate three nonsalable intermediate products. ICRB, ING4 and XGE3 These intermediate products are further processed separately to produce crude oil, natural gas liquids (NGL) and natural gas (measured in liquid equivalents) (Click the icon to view the overview) A federal law that has recently been passed taxes crude oil at 30% of operating income No new tax is to be paid on natural gas liquid or natural gas (Click the icon to view additional information Read the cosurements Total Requirement 1. Alocate the August 2017 joint cost among the three products using the (a) Physical measure method and (b) NRV method First, allocate the August 2017 joint cost using the physical measure method (Round the woights to five decimal places and joint costs to the nearest cent) Crude Oil NGL Gas Question Viewer Physical measure of total production Weighting Joint costs allocated RE icon to view the overview.) of the process and results. 1. Allocate the August 2017 joint cost among the three products using the (a) Physical-measure method and (b) NRV method - X Overview of the process and results. 3 An overview of the process and results for August 2017 are shown here (Note The numbers are small to keep the focus on key concepts) Joint Costs Separable Costs $2,000 Crude Oil ICR8 Processing 150 barrels $22 per barrel $120 Hydrocarbons Processing NGL 100 barrels $11 per barrel Processing $100 INO4 Natural Gas 750 evtbarrels 51.70 per equt barrel Processing $215 XGES Print Done ne ework: C... Question 14, E16-26 (si... Part 1 of 5 HW Score: 69.32%, 13.86 of 20 points O Points: 0 of 1 Gas, a large energy conglomerate, jointly processes purchased generate three nonsalable intermediate products. ICR8, ING4, e intermediate products are further processed separately to il natural gas liquids (NGL), and natural gas (measured in liquid A federal law that has recently been passed taxes crude income. No new tax is to be paid on natural gas liquid or (Click the icon to view additional information) Rea More Info ments LIE on to view the overview.) Allocate the August 2017 joint cost among the three products using the (a) Physical measure method and (b) NRV method Overv More info the An ove focus Starting August 2017, St Thomas Oil & Gas must report a separate product-line income statement for crude oil One challenge facing St. Thomas Oil & Gas is how to allocate the joint cost of producing the three separate salable outputs. Assume no beginning or ending inventory Print Done Natural Gas 750 eqvt barrels $1.70 per eqvt barrel Processing $215 XGE3 ork: C... Question 14, E16-26 (si... Part 1 of 5 HW Score: 69.32%, 13.86 of 20 points O Points: 0 of 1 as a large energy conglomerate jointly processes purchased herate three nonsalable intermediate products. ICR8, ING4. termediate products are further processed separately to atural gas liquids (NGL), and natural gas (measured in liquid A federal law that has recently been passed taxes crude oil a income. No new tax is to be paid on natural gas liquid or natu (Click the icon to view additional information ) Read the requirements Requirements to view the overview) HH llocate the August 2017 joint cost among the three products using the (a) Physical measure method and (b) NRV method - X Overv Requirements - the An ove focus o 1. Allocate the August 2017 joint cost among the three products using the following a. Physical measure method b. NRV method 2. Show the operating income for each product using the methods in requirement 1 3. Discuss the pros and cons of the two methods to St. Thomas Oil & Gas for making decisions about product emphasis (pricing, sell-or-process- further decisions, and so on) Print Done Trel