Stenback Oil & Gas, a large energy conglomerate, jointly processes purchased hydrocarbons to generate three nonsalable intermediate products:

ICR$8,$ ING$4,$ and XGE$3.$ These intermediate products are further processed separately to produce crude oil, natural gas liquids $($NGL$),$ and natural

gas $($measured in liquid equivalents$).$

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A federal law that has recently been passed taxes crude oil at $30\%$ of operating income. No new tax is to be paid on natural gas liquids or

natural gas.

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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.$)$

Requirements

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 $1.$

Discuss the pros and cons of the two methods to Stenback Oil & Gas

for making decisions about product emphasis $($pricing$,$ sell$-$or$-$process$-$

further decisions, and so on$)$

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

More info

Starting August $2020,$ 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 salable outputs. Assume no

beginning or ending inventory.

I NEED ALL REQUIREMENTS, PLEASE USE A REFERENCE PROBLEM AS LAST TIME I GOT BAD ANSWERS ON THIS