Sanitation products after processing specialized chemicals

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Reference no: EM133974938

Question

Caribu Company produces sanitation products after processing specialized chemicals; The following relates to its activities:

1 Kilogram of chemicals purchased for $2000 and with an additional $1000 is processed into 400 grams of Crystals and 80 litres of a Cleaning agent. At split-off, a gram of Crystal can be sold for $1 and the Cleaning agent can be sold for $4 per litre.

At an additional cost of $400, Caribu can process the 400 grams of Crystal into 500 grams of Detergent that can be sold for $2 per gram. The 80 litres of Cleaning agent is packaged at an additional cost of $300 and made into 200 packs of Softener that can be sold for $2 per pack. Required:

1. Allocate the joint cost to the Detergent and the Softener using the following:

a. Sales value at split-off method

b. NRV method

Reference no: EM133974938

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