Molo Oil Company produces gasoline, home heating oil, and jet fuel from crude oil in a joint processing operation. Joint processing costs up to the split-off point total $380,000 per month. For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product Selling Price Gasoline $26.00 per gallon Heating Oil $20.00 per gallon Jet Fuel $32.00 per gallon Monthly Output 14, 200 gallons 22,100 gallons 5,400 gallons Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below. Additional Processing Selling Product Costa Price Gasoline $ 86,490 $31.70 per gallon Heating $125,095 $26.70 per gallon 011 Jet Fuel $ 57,700 $40.70 per gallon Required: 1. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? 2. Based on your analysis in requirement 1, which product or products should be sold at the split-off point and which productor products should be processed further? Complete this question by entering your answers in the tabs below. Required Required 2 What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? 5.40 gallons Each product can be processed further after the split-off point. Additional processing requires no spec processing costs (per quarter) and unit selling prices after further processing are given below: Product Gasoline Heating Oil Jet Fuel Additional Processing Costs $ 86,490 $125,095 $ 57,700 Selling Price $31.70 per gallon $26.70 per gallon $40.70 per gallon Required: 1. What is the financial advantage (disadvantage) of further processing each of the three products beyone 2. Based on your analysis in requirement 1, which product or products should be sold at the split-off poin products should be processed further? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of further processing each of the three products beyond the sp Home Gasoline Jet Fuel Heating Oil Financial advantage (disadvantage) of further processing Jet Fuel $32.00 per gallon 5,400 gallons Each product can be processed further after the split-off point. Additional processing requires no processing costs (per quarter) and unit selling prices after further processing are given below: Product Gasoline Heating oil Jet Fuel Additional Processing Costs $ 86,490 $125,095 $ 57,700 Selling Price $31.70 per gallon $26.70 per gallon $40.70 per gallon Required: 1. What is the financial advantage (disadvantage) of further processing each of the three products 2. Based on your analysis in requirement 1, which product or products should be sold at the split-o products should be processed further? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Based on your analysis in requirement 1, which product or products should be sold at the split-off point products should be processed further? Gasoline Home Heating Oil Jet Fuel Sell at split-off point? Process further
