Joint costs $1,800

BC BM
Beginning Inventory (pound) 0 0
Production (pound) 6,000 6,000
Sales (pound) 26,400 7,200
Ending Inventory (pound) - -
Selling Price per pound $ 2.3 $ 1.2
Additional Proecessing Cost

Step 1: Calculate joint cost RATE

Crude Oil
Qty Selling Price Total
Sales Value using Production Quantity after
further processing 150 $ 18.0 $ 2,700
(-/-) Deduct separable cost after further
processing (175)
NET Realizable Value $ 2,525
Weighting 0.63125
Joint Cost Allocation 1136

Production Cost Rate per Gallon

(Joint Cost Allocation+separable cost/Qty) 6.4
Crude Oil
Step 2: Calculate Gross Profit Qty Selling Price Total
150 $ 18.0 $ 2,700

Revenue $ -
COGS
- Beginning Inventory - $ -
- Joint Cost Allocation = Production Cost 1136 $ -
-Separable cost 175
Production Cost $ 1,311
- (-/-) Ending Inventory (qty x joint cost RATE) 0
Total COGS $ (1,311)
GROSS Profit $ 1,389
GROSS MARGIN Percentage 51%
Tax 30% $ (416.63)
Earning After Tax $ 972.13
Earning After Tax Percentage 36%
 After Further Processing
Crude oIl NGL Natural Gas
0 0
150 50 800
150 50 800
- -
$ 18.0 $ 15.0 $ 1.3
175 105 210

NGL Natural Gas GRAND

Qty Selling Price Total Qty Selling Price Total TOTAL

50 $ 15.0 $ 750 $ 800 $ 1.3 $ 1,040 $ 3,450

(105) (210) (490)

$ 645 $ 830 $ 4,000
0.16125 0.2075
290 374 1800

3.7 $ 0.2
NGL Natural Gas GRAND
Qty Selling Price Total Qty Selling Price Total TOTAL
50 $ 15.0 $ 750 $ 800 $ 1 $ 1,040 $ 4,490

$ - $ -
$ - $ -
- $ - $ - $ -
290 $ 374
105 210
$ 395 $ 584
0 0
$ (395) $ (584)
$ 355 $ 457
47% 44%
$ (106) $ (137)
$ 248 $ 320
33% 31%
Joint costs $31,680

BR SR
Beginning Inventory (tons) 0 0
Production (tons) 6,000 6,000
Sales (tons) 26,400 7,200
Ending Inventory (tons) - -
Selling Price per tons $ 2.3 $ 1.2

Step 1: Calculate joint cost RATE

BC BM GRAND
Qty Qty TOTAL
Physical Measure using Production Quantity 6,000 6,000 12,000
Weighting 0.5 0.5
Joint Cost Allocation $15,840 $15,840 $ 31,680
Joint Cost Rate per Gallon
(Joint Cost Allocation/Qty) $ 3 $ 3

Step 2: Calculate Gross Profit

BC
Qty Selling Price Total
Revenue 26,400 $ 2.3 $ 60,720
COGS
- Beginning Inventory $ -
- Joint Cost Allocation $15,840
- (-/-) Ending Inventory - $ -
$ (15,840)
GROSS MARGIN 44,880
GROSS MARGIN Percentage 74%
 BM GRAND
Qty Selling Price Total TOTAL
7,200 $ 1.2 $ 8,640 $ 69,360

$ - $ -
$15,840 $ 31,680
- $ - $ -
$ (15,840) $ (31,680)
(7,200) 37,680
-83% 54%