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The N CORPORATION buys crude vegetable oil. Refining this oil results in four products at the split-off point: A, B, C, and D. Product C
The N CORPORATION buys crude vegetable oil. Refining this oil results in four products at the split-off point: A, B, C, and D. Product C is fully processed by the split-off point. Products A, B, and D can individually be further processed into Super A, Super B, and Super D. In the most recent month of October the output at the split-off point was: Product A, 300,000 gallons Product B, 100,000 gallons Product C, 50,000 gallons Product D, 50,000 gallons The joint costs of producing the crude vegetable oil were $100,000. N had no beginning or ending inventories. Sales of Product C in October were $50,000 at the split off point. Products A, B, and D were further refined into Super A, B, and D and then were sold. Data related to October are: Although Products A. B, and D were further processed, N had the option of selling them at the split-off point. This alternative would have yielded the following revenues for the October production at the split off point: Product A, $50,000 Product B, $30,000 Product D, $70,000 Required: Compute the gross margin for each product sold in October, using the following methods: Physical weights method Sales value at split-off method Net realizable value method If the number produced were not the same as the number sold, very briefly explain to what extent the computation in question 1 above would have been the same or different. Could N have increased its October operating income by selling A, B, or D at the split off point rather than further processing and selling Super A, B, or D
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