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The Stenback Spirits Company produces two products-methanol (wood alcohol) and turpentine-by a joint process. Joint costs amount to $122,000 per batch of output. Each
The Stenback Spirits Company produces two products-methanol (wood alcohol) and turpentine-by a joint process. Joint costs amount to $122,000 per batch of output. Each batch totals 12,500 gallons: 25% methanol and 75% turpentine. Both products are processed further without gain or loss in volume. Separable processing costs are methanol, $4 per gallon, and turpentine, $3 per gallon. Methanol sells for $28 per gallon. Turpentine sells for $20 per gallon. Read the requirements.
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