Answered Essay: 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,

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
Buy Essay
Calculate your paper price
Pages (550 words)
Approximate price: -

Help Me Write My Essay - Reasons:

Best Online Essay Writing Service

We strive to give our customers the best online essay writing experience. We Make sure essays are submitted on time and all the instructions are followed.

Our Writers are Experienced and Professional

Our essay writing service is founded on professional writers who are on stand by to help you any time.

Free Revision Fo all Essays

Sometimes you may require our writers to add on a point to make your essay as customised as possible, we will give you unlimited times to do this. And we will do it for free.

Timely Essay(s)

We understand the frustrations that comes with late essays and our writers are extra careful to not violate this term. Our support team is always engauging our writers to help you have your essay ahead of time.

Customised Essays &100% Confidential

Our Online writing Service has zero torelance for plagiarised papers. We have plagiarism checking tool that generate plagiarism reports just to make sure you are satisfied.

24/7 Customer Support

Our agents are ready to help you around the clock. Please feel free to reach out and enquire about anything.

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.


Let us write that nagging essay.


Submit Your Essay/Homework Instructions

By clicking on the "PLACE ORDER" button, tell us your requires. Be precise for an accurate customised essay. You may also upload any reading materials where applicable.


Pick A & Writer

Our ordering form will provide you with a list of writers and their feedbacks. At step 2, its time select a writer. Our online agents are on stand by to help you just in case.


Editing (OUR PART)

At this stage, our editor will go through your essay and make sure your writer did meet all the instructions.


Receive your Paper

After Editing, your paper will be sent to you via email.

× How can I help you?