I. Wood River Refinery WEB- Mlnlng LLG The Wood River Reﬁnery is an oil reﬁnery located in … Wmmm Roxana, Illinois, about 15 miles north of St. Louis. Wood ‘ River is the largest reﬁnery operated by Phillips 66, and is capable of reﬁning 10 million barrels of crude oil per month. The reﬁnery uses a standard costing system with absorption costing. All over/under applied costs are closed to cost of goods sold at the end of each month. Wood River reﬁnes crude oil, measured in barrels into gasoline, measured in gallons. During late December 2022, the reﬁnery was shut down for routine maintenance, and so at the start of January, 2023, has no inventory of any kind. All budgets are all based on having no inventory of any type in the plant at month end. Wood River has two direct materials: crude oil, which is added at the start of the process, and additives, which are added at the end of the process. All overhead, which includes labor, is considered a ﬁxed cost, and is added evenly during the process. Overhead is allocated based on machine hours. Wood River’s monthly budget, set in late 2022, calls for the reﬁnery to convert 9 million barrels of crude oil into 12 million gallons of gasoline each month. Doing so should require 120,000 machine hours, and 48 million grams of additive. The budget assumes that crude oil costs $100 per barrel and additives cost $5 per gram. The total static budget cost to produce 12 million gallons of gasoline is $1,740 million. During J anuagy, 2023, Wood River actually spent the following amounts: 8.8 million barrels of crude oil $ 422,400,000 51 million grams of additive $ 306,000,000 Fixed overhead (*) $ 624 000 000 Total expenditures $1,352,400,000 At the end of the day on January 31, 2023, Wood River had the following inventory: Raw materials inventory of 5.1 million grams of additive Work-in-process inventory of 800,000 gallons of gasoline, 25% through production Finished goods inventory of 1.3 million gallons of gasoline In addition, Wood River completed and sold 8.9 million gallons of gasoline during the month.