The Stenback Company produces two products, turpentine and methanol (wood alcohol), by a joint process....
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The Stenback Company produces two products, turpentine and methanol (wood alcohol), by a joint process. Joint costs amount to $144,000 per batch of output. Each batch totals 40,000 litres: 25% methanol and 75% turpentine. Both products are processed further without gain or loss in volume. Separable processing costs are methanol, $0.90 per litre; turpentine, $0.60 per litre. Methanol sells for $6.30 per litre, turpentine sells for $4.20 per litre. Required Requirement 1. How much joint costs per batch should be allocated to turpentine and to methanol, assuming that joint costs are allocated based on a physical measure (number of litres at splitoff point) basis? Calculate the amount of the joint costs per batch that will be allocated to turpentine and to methanol using the physical measure method. Assume that joint costs are allocated based on the number of litres at splitoff point. (Round the weightings to five decimal places.) Methanol Turpentine Total Physical measure of total production Weighting Joint costs allocated
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