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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.

  1. 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

  1. 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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