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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 4. The company has discovered an additional process by which the methanol (wood alcohol) can be made into a pleasant-tasting alcoholic beverage. Assuming no other changes in cost other than those stated in the requirement, what is the joint cost applicable to the ethanol (using the NRV method)? Should the company produce the ethanol? Show your computations. (Round the weightings to five decimal places. Round joint costs allocated to the nearest dollar.) Lab Ethanol Turpentine Total Final sales value of total production Deduct separable costs NRV at splitoff point Weighting Joint costs allocated

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