(Solution) - Boone Oil Company transports crude oil to its refinery where -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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Boone Oil Company transports crude oil to its refinery where it is processed into main products gasoline, kerosene, and diesel fuel, and by-product base oil. The base oil is sold at the split-off point for $500,000 of annual revenue, and the joint processing costs to get the crude oil to split-off are $5,000,000. Additional information includes:

Required:
Determine the allocation of joint costs, using the adjusted sales valuemethod.