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Shell Corporation refines crude oil into gasoline and diesel using process costing. In July 2033, the company processes 80,000 barrels of crude oil costing $4,000,000.
- Shell Corporation refines crude oil into gasoline and diesel using process costing. In July 2033, the company processes 80,000 barrels of crude oil costing $4,000,000. The refining process yields:
Product | Barrels | Cost per Barrel ($) |
Gasoline | 50,000 | 80 |
Diesel | 30,000 | 100 |
- Required:
- Allocate joint costs using the sales value at split-off method.
- Determine the cost per equivalent unit for gasoline and diesel.
- Calculate the total joint production costs allocated to each product.
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