(Question and Answer): Sunshine Oil Company buys crude vegetable oil. Refining this oil results in four products at the splitoff point.​ A, B,​ C, and D. Pro

Sunshine 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:

Product​ A,

Don't use plagiarized sources. Get Your Custom Essay on
(Question and Answer): Sunshine Oil Company buys crude vegetable oil. Refining this oil results in four products at the splitoff point.​ A, B,​ C, and D. Pro
Get an essay WRITTEN FOR YOU, Plagiarism free, and by an EXPERT!
Order Essay

322 comma 400


Product​ B,

119 comma 600


Product​ C,

52 comma 000


Product​ D,

26 comma 000


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

$ 96 comma 000



had no beginning or ending inventories. Sales of product C in December were

$ 24 comma 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 $249,600 $320,000
Super B 102,400 160,000
Super D 152,000 160,000


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, $ 84 comma 000


Product​ B, $ 72 comma 000


Product​ D, $ 60 comma 000


Compute the​ gross-margin percentage for each product sold in​ December, using the following methods for allocating the

$ 96 comma 000

joint​ costs:
a. Sales value at splitoff
b. ​Physical-measure
c. NRV
2. CouldSunshine
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.

Expert Answer


Answer 1.
Allocation of Joint Cost
Under Sales Value at Split off
Product Sales Value at Split off Joint Cost Allocated (Sales Value / Total Sales Value) X $96,000)
A                   84,000                                33,600
B                   72,000                                28,800
C                   24,000                                  9,600
D                   60,000                                24,000
Total                 240,000                                96,000
Allocation of Joint Cost
Under Physical Method
Product Physical Output in gallons Joint Cost Allocated (Physical Output / Total Physical Output) X $96,000)
A                 322,400                                59,520
B                 119,600                                22,080
C                   52,000                                  9,600
D                   26,000                                  4,800
Total                 520,000                                96,000
Allocation of Joint Cost
Under NRV Method
Product Sales Revenue After further processing Sales Revenue at the point of split off Further Processing Costs Net Realizable Value Joint Cost Allocated
Super A                 320,000                                         –               249,600                  70,400                 42,240
Super B                 160,000                                         –               102,400                  57,600                 34,560
C                             –                                24,000                           –                  24,000                 14,400
Super D                 160,000                                         –               152,000                    8,000                   4,800
Total                 640,000                                24,000               504,000               160,000                 96,000
Answer 2.
Sales Revenue After further Processing          320,000          160,000          160,000
Sales Revenue At the point of split off            84,000            72,000            60,000
Incremental Sales revenue          236,000            88,000          100,000
Further Processing Costs          249,600          102,400          152,000
Profit (Loss) arising due to further processing          (13,600)          (14,400)          (52,000)
Sunshine should not further process any product as it will decrease the operating profit as shown above

Top Grade Homework
Order NOW For a 10% Discount!
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.


Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.


Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.


Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.


Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.

× Contact Live Agents