Thanks! 9-9. Sell at Split-Off Versus Process Further. Rifki Refining produces naphtha, kero- sene,...
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9-9. Sell at Split-Off Versus Process Further. Rifki Refining produces naphtha, kero- sene, and other distillates from a joint process costing $120,000 for a certain volume of crude oil. From this process, 1,000 barrels of naphtha can be produced and are allocated $35,000 of joint costs. This can be sold at the split-off point for $60 per barrel or further processed into other products and sold for $85 per barrel. The pro- cessing cost for further refining 1,000 barrels of naphtha is $20,000. The other distillates can be sold now for $80,000 or processed further for $40,000 and sold for $110,000. Kerosene can be sold for $60,000 at the split-off point. Kero- sene is also allocated $35,000 of the joint costs. Other distillates are allocated the remaining joint costs. Questions: 1. 2. Which products should be sold at the split-off point or processed further? What is the most the company can pay for crude oil and not lose money on the refin- ing process
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