Requirement 4. The company has discovered an additional process by which methanol? (wood alcohol) can be made into a? pleasant-tasting alcoholic beverage. The selling price of this beverage would be $45 a gallon. Additional processing would increase separable costs by $6

per gallon? (in addition to the $2 per gallon separable cost required to yield? methanol). The company would have to pay excise taxes of? 20% on the selling price of the beverage. Assuming no other changes in? cost, what is the joint cost applicable to the wood alcohol? (using the NRV? method)? Should the company produce alcoholic? beverages? Show your computations. Begin by calculating the joint cost applicable to the wood alcohol? (using the NRV? method).

Please show work

The Wood Spirits Company produces two products-methanol (wood alcohol) and turpentine-by a joint process. Joint costs amount to $116,000 per batch of output. Each batch totals 13,000 gallons: 25% methanol and 75% turpentine. Both products are processed further without gain or loss in volume. Separable processing costs are methanol, $2 per gallon, and turpentine, $1 per gallon. Methanol sells for $20 per gallon. Turpentine sells for $15 per gallon. Read the requirements. Cost of goods sold Joint costs ..... Separable costs Total cost of goods sold Gross margin 29,000 87,000 116,000 6,500 9,750 16,250 35,500 96,750 132,250 $ 29,500 $ 49,500 $ 79,000 Now show the operating income for both products using the NRV method. Methanol Turpentine Total Revenue $ 65,000 $ 146,250 $ 211,250 Cost of goods sold Joint costs Separable costs 34,800 6,500 81,200 116,000 9,750 16,250 41,300 90,950 132,250 Total cost of goods sold $ 23,700 $ 55,300 $ 79,000 Gross margin Requirement 4. The company has discovered an additional process by which the methanol (wood alcohol) can be made into a pleasant-tasting alcoholic beverage. The selling price of this beverage would be $45 a gallon. Additional processing would increase separable costs $6 per gallon (in addition to the $2 per gallon separable cost required to yield methanol). The company would have to pay excise taxes of 20% on the selling price of the beverage. Assuming no other changes in cost, what is the joint cost applicable to the wood alcohol (using the NRV method)? Should the company produce the alcoholic beverage? Show your computations. Begin by calculating the joint cost applicable to the wood alcohol (using the NRV method). (Round the weights to five decimal places.) Final sales value of total production Deduct separable costs NRV at splitoff point Weighting Joint costs allocated Alcohol Bev. Turpentine Total