Save Score: 0 of 8 pts V 6 of 7 (0 complete) HW Score: 0%, 0 of 21 pts Exercise 15-22 (similar to) Question Help Stenback Oil & Gas, a large energy conglomerate, jointly processes purchased hydrocarbons to generate three nonsaleable intermediate products ICR8, 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) An overview of the process and results for August 2018 is shown here. (Note. The numbers are small to keep the focus on key concepts.) FF(Click the icon to view the overview diagram ) A federal law has recently been passed that taxes crude oil at 30% of operating income. No new tax is to be paid on natural gas liquid or natural gas. Starting August 2018, Stenback Oil & Gas must report a separate product-line income statement for crude oil. One challenge facing Stenback Oil & Gas is how to allocate the joint cost of producing the three separate saleable outputs Assume no beginning or ending inventory Required i Overview of the process and results. - X and the w X Required 4 Joint Costs Separable Costs $2,000 1. Allocate the August 2018 joint cost among the three products using Crude Oil a. Physical measure method ICR8 Processing b. NRV method 200barrels @ $ 150 Show the operating income for each product using the methods in requirement 1. $17 per barrel Which, if any, method would you use for product emphasis? Explain. Draft a letter to the taxation authorities on behalf of Stenback Oil & Gas that justifies the joint cost allocation method you recommend Stenback use. NGL Hydrocarbons Processing IN G4 Processing 50 barrels @ $ 95 $ 14 per barrel Print Done Natural Gas XGE3 Processing 750eqvt. barrels @ $220 $ 1 10 per eqvt. barrel Clear All Check Answer Print Done 12:20 PM ENG Z 2021-04-11 C Type here to search II O