A Pharmaceutical Company purchase a raw material, which is then processed to yield three chemicals : Anarol, Estyl and Betryl. In October, 2018 the pharmaceutical company purchased 10,000 gallons of...

Extracted text: A Pharmaceutical Company purchase a raw material, which is then processed to yield three chemicals : Anarol, Estyl and Betryl. In October, 2018 the pharmaceutical company purchased 10,000 gallons of the raw material at a cost of $ 12,50,000 and company incurred additional joint conversion costs of $ 7,50,000. October, 2018 sales and production information are as follows: Gallons Price at split produced off (per Gallon) cost per Gallon 2,000 $350 3,000 $240 5,000 $200 Further processing Eventual Sales Price Anarol Estyl Betryl $30 $360 Anarol and Estyl are sold to other pharmaceutical companies at the split off point. Betryl can be sold at the split-off point or processed further and packaged for sale as an asthma medication. Required: (1) Allocate the Joint cost to three products using the physical units method, the sales-value at split-off method and the net realizable value method. (1I) Suppose that half of October, 2018 production of Estyl could be purified and mixed with all of the Anarol to produce a veterinary grade anaesthetic. All further processing costs amount to $ 2,25,000. The selling price of the veterinary grade Anarol is $ 650 per gallon. Should the pharmaceutical company further process the anarol into anesthetic ? Assume, the resultant quantity of Veterinary grade anarol produced is 2,000 gallons only.