The Sunny 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 (December), the output at the splitoff point was as follows: (Click the icon to view the information.) Read the requirements Requirement 1. Compute the gross-margin percentage for each product sold in December, using the different methods for allocating the $80,000 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.) i Requirements Sales value of total production at splitoff Joint costs allocated Weighting 1. Compute the gross-margin percentage for each product sold in December, using the following methods for allocating the $60,000 joint costs: a. Sales value at splitoff b. Physical-measure B c. NRV D 2. Could Sunny have increased its December 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. Print Done Compute the gross margin percentage using the sales value at splitoff method to allocate the joint costs. (Enter a "O" for any cells with a zero balance. Round the percentages to two decimal places. XXX%. Use parentheses or a minus sign when entering negative amounts.) Super A Super B Super D Revenues Joint costs Separable costs More Info Gross margin Gross margin percentage % % 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.) Physical measure of Joint costs total production Weighting allocated A . Product A. 253,000 gallons . Product 3, 92.000 gallons . Product C. 69,000 gallons . Product D. 46,000 gallons B D The joint costs of purchasing and processing the crude vegetable oil were $60,000. Sunny had no beginning or ending inventories. Sales of product in December were $60,000. Products A, B, and D were further refined and then sold. Data related to December are as follows: Separable Processing Costs to Make Super Products Revenues Super A $ 271,000 $ 400,000 Super B 34,000 100,000 Super D 5,000 50,000 Sunny had the option of selling products A B. and D at the splitoff point. This alternative would have yielded the following revenues for the December production: . Product A $50,000 . Product B, $30.000 Product D. $60.000 Compute the gross margin percentage using the physical-measures method to allocate the joint costs. (Enter a "O" for any cells with a zero balance. Round the percentages to two decimal places, XXX%. Use parentheses of "o Super A Super B Super D Revenues Joint costs Separable costs Gross margin Print Done Gross margin percentage 26 The Sunny 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 (December), the output at the splitoff point was as follows: (Click the icon to view the information.) Read the requirements Compute the gross margin percentage using the physical-measures method to allocate the joint costs. (Enter a "O" for any cells with a zero balance. Round the percentages to two decimal places, XXX%. Use parentheses or a minus sign when entering negative amounts.) Super A Super B Super D i Requirements Revenues Joint costs Separable costs Gross margin 1. Compute the gross-margin percentage for each product sold in December, using the following methods for allocating the $60,000 joint costs: a. Sales value at splitoff b. Physical-measure c. NRV 2. Could Sunny have increased its December 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. Gross margin percentage % % % 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.) Net realizable Joint costs value Weighting allocated Print Done Super A Super B Super D i More Info 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 Super A Super B Super D . Product A. 253.000 gallons . Product B, 92.000 gallons . Product C. 69,000 gallons . Product D. 46,000 gallons Revenues Joint costs Separable costs Gross margin Gross margin percentage % 96 % % Super A Requirement 2. Could Sunny have increased its December 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 recor 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.) Effect on operating income from further processing The joint costs of purchasing and processing the crude vegetable oil were $80,000. Sunny had no beginning or ending inventories. Sales of product C in December were $60,000. Products A, B, and D were further refined and then sold. Data related to December are as follows: Separable Processing Costs to Make Super Products Revenues $ 271,000 $ 400,000 Super B 34,000 100,000 Super D 5,000 50,000 Sunny had the option of selling products A B. and D at the splitoff point. This alternative would have yielded the following revenues for the December production: - Product A $50,000 . Product B, $30.000 Product D. $60.000 A B = D is/are sold at their splitoff Print Done Operating income can be increased by point rather than processed further
