Sinclair Oil & Gas, a large energy conglomerate, jointly processes purchased hydrocarbons to generate three nonsalable intermediate products: ICR8, ING4, and XGE3, These intermediate products are further processed separately to produce crude of, natural gas liquids (NGL), and natural gas (measured in liquid equivalents) (Click the icon to view the overview.) A federal law that has recently been passed taxes cnude oil at 30% of operating income. No new tax is to be paid on natural gas liquids or natural gas (Click the icon to view additional information.) Read the requirements. Requirement 1. Allocate the August 2020 joint cost among the three products using the (a) Physical-measure method and (b) NRV method. First, allocate the August 2020 joint cost using the physical-measure method. (Round the weights to five decimal places and joint costs to the nearest cent.)) Physical measure of total production Crude Oil NGL Gas Total Weighting Joint costs allocated reduction Overview of the process and results. An overview of the process and results for August 2020 are shown here (Note: The numbers are small to keep the focus on key concepts.) Joint Costs $1,600 Separable Costs - Crude Oil ICR8 Processing $130 200 barrels @ $19 per barrel Hydrocarbons Processing ING4 Processing $110 Processing XGE3 $220 Print Done NGL 125 barrels @ $10 per barrel Natural Gas 925 eqvt. barrels @ $1.20 per eqvt. barrel - More info Starting August 2020, Sinclair Oil & Gas must report a separate product-line income statement for crude oil. One challenge facing Sinclair Oil & Gas is how to allocate the joint cost of producing the three separate salable outputs. Assume no beginning or ending inventory. Print Done - Requirements 1. 2. Allocate the August 2020 joint cost among the three products using the following: a. Physical-measure method b. NRV method. Show the operating income for each product using the methods in requirement 1. 3. Discuss the pros and cons of the two methods to Sinclair Oil & Gas for making decisions about product emphasis (pricing, sell-or-process- further decisions, and so on). Print Done -