Langholmen-Sverige AB crushes and refines mineral ore into three products in a joint-cost operation. Costs and production for 2018 were as follows: 

● Department 1, at initial joint costs of SKr 420,000, produces 20,000 kg of Vadstena, 60,000 kg of Vättervik and 100,000 kg of Birgitta. 

● Department 2 processes Vadstena further at a cost of SKr 100,000. 

● Department 3 processes Vättervik further at a cost of SKr 200,000. 

Results for 2018 are: 

● Vadstena: 20,000 kg completed; 19,000 kg sold for SKr 20 per kg; closing stock, 1000 kg. 

● Vättervik: 60,000 kg completed; 59,000 kg sold for SKr 6 per kg; closing stock, 1000 kg. 

● Birgitta: 100,000 kg completed; 99,000 kg sold for SKr 1 per kg; closing stock, 1000 kg; Birgitta required no further processing. 

Required

1. Use the estimated NRV method to allocate the joint costs of the three products. Calculate the total costs and unit costs of closing stock. 

2. Calculate the individual gross-margin percentages of the three products. 

3. Suppose Langholmen-Sverige receives an offer to sell all of its Vättervik product for a price of SKr 2 per kg at the split-off point before going through Department 3, just as it comes off the production line in Department 1. Using last year’s figures, would Langholmen-Sverige be better off by selling Vättervik that way or processing it through Department 3 and selling it? Show computations to support your answer. Disregard all other factors not mentioned in the problem.