The South Oil Company buys crude vegetable oil. Refining this oil results in four products at the splitoff point. A$,$ B$,$ C$,$ and $D.$ Product $C$ is fully processed by the splitoff point. Products $A,$ B$,$ and $D$

can individually be further refined into Super A$,$ Super B$,$ and Super D$.$ In the most recent month $($November$),$ the output at the splitoff point was as follows:

$($i$)($Click the icon to view the information.$)$

Read the requirements.

Requirement $1.$ Compute the gross$-$margin percentage for each product sold in November, using the following methods for allocating the $$40,000$ joint costs:

a$.$ Sales Value at Splitoff. Begin by entering the amounts in the table and allocate the joint costs. $($Enter the weights to four decimal places.$)$

Compute the gross margin percentage using the sales value at splitoff method to allocate the joint costs. $($Enter a $"0"$ for any cells with a zero balance. Round the percentages to two decimal places,

X$.$XX$\%.$ Use parentheses or a minus sign when entering negative amounts.$)$

b$.$ Allocate the joint costs using the physical measure method. Enter the amounts in the table and allocate the joint costs. $($Enter the weights to four decimal places.$)$ b$.$ Allocate the joint costs using the physical measure method. Enter the amounts in the table and allocate the joint costs. $($Enter the weights to four decimal places.$)$

Compute the gross margin percentage using the physical measures method to allocate the joint costs. $($Enter a $"0"$ for any cells with a zero balance. Round the percentages to two decimal places,

X$.$XX$\%.$ Use parentheses or a minus sign when entering negative amounts.$)$

c$.$ Allocate the joint costs using the net realizable value method. Enter the amounts in the table and allocate the joint costs. $($Enter the weights to four decimal places.$)$ c$.$ Allocate the joint costs using the net realizable value method. Enter the amounts in the table and allocate the joint costs. $($Enter the weights to four decimal places.$)$

Compute the gross margin percentage using the NRV method to allocate the joint costs. $($Enter a $"0"$ for any cells with a zero balance. Round the percentages to two decimal places, X$.$XX$\%.$ Use

parentheses or a minus sign when entering negative amounts.$)$

Requirement $2.$ Could South Oil have increased its November operating income by making different decisions about the further processing of products A$,$ B$,$ or D$?$ Show the effect on operating

income of any changes you recommend.Requirement $2.$ Could South Oil have increased its November operating income by making different decisions about the further processing of products A$,$ B$,$ or D$?$ Show the effect on operating

income of any changes you recommend.

Determine the formula you will use to make your decision. Then enter the amounts for each product and determine the effect on operating income of the decision. $($Enter negative effects with

parentheses or a minus sign.$)$

Operating income can be increased by

point rather than processed further.

if

is$/$are sold at the splitoffRequirements

Compute the gross$-$margin percentage for each product sold in November,

using the following methods for allocating the $$40,000$ joint costs:

a$.$ Sales value at splitoff

b$.$ Physical measure

c$.$ NRV

Could South Oil have increased its November operating income by making

different decisions about the further processing of products A$,$ B$,$ or D$?$ Show

the effect on operating income of any changes you recommend.

sults in four products at the splitoff point. A$,$ B$,$ C$,$ and D$.$ Product C is fully processed by the splitoff point. Products A$,$

b$.$ In the $m$

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Product A$,250,000$ gallons

Product $B,95,000$ gallons

Product C$,45,000$ gallons

Product $D,110,000$ gallons

The joint costs of purchasing and processing the crude vegetable oil were

$$40,000.$ South had no beginning or ending inventories. Sales of product C

in November were $$60,000.$ Products A$,$ B$,$ and D were further refined and

then sold. Data related to November follow:

Southhad the option of selling products $A,B,$ and $D$ at the splitoff point. This

alternative would have yielded the following revenues for the November

production:

Product A$,$ $$40,000$

Product $B,$$$30,000$

Product $D,$$$70,000$