Sinclair Oil \& Gas, a large energy conglomerate, jointly processes purchased hydrocarbons to generate three A federal law that has recently been passed taxes nonsalable intermediate products: ICR8, ING4, and XGE3. crude oil at 30% of operating income. No new tax These intermediate products are further processed is to be paid on natural gas liquid or natural gas. separately to produce crude oil, natural gas liquids (NGL), (Click the icon to view additional information.) and natural gas (measured in liquid equivalents). Read the requirements. (Click the icon to view the overview.) Requirement 1. Allocate the August 2017 joint cost among the three products using the (a) Physical-measure method and (b) NRV method. First, allocate the August 2017 joint cost using the physical-measure method. (Round the weights to five decimal places and joint costs to the nearest cent.) Overview of the process and results. An overview of the process and results for August 2017 are shown here (Note: The numbers are small to keep the farie an Lau mannantel More info Starting August 2017, 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. Requirements 1. Allocate the August 2017 joint cost among the three products using the following: a. Physical-measure method b. NRV method. 2. 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-processfurther decisions, and so on)