ABC Corporation produces two products (A-1 and B-2) by joint process.

At the split-off point, each batch produces 60,000 kilograms in total; 40% of product A-1 and 60% of product B-2. Joint costs amount to $182,000 per batch produced.

Both products are further processed with losses in volume; 10% losses in volume for product A-1, and 5% losses in volume for product B-2. Losses in volume occur at the end of the further processing.

Separable processing costs are $1.20 per kilogram for product A-1, and $0.90 per kilogram for product B-2.

Product A-1 sells for $7.20 per kilogram and product B-2 sells for $9.30 per kilogram.

Required:

1. How much joint costs per batch should be allocated to products A-1 and B-2 assuming that joint costs are allocated on a physical-measure basis (number of kilograms at the split-off point)?
2. If joint costs are assigned on an NRV basis, how much joint costs should be assigned to products A-1 and B2?
3. Prepare product-line income statements per batch considering that joint costs are allocated on an NRV basis.
4. ABC corporation is considering a new process by which product A-1 can be further processed into product C-4. The selling price of product C-4 would be $16.50 a kilogram. 15% losses in volume for product C-4 would occur at the end of the further processing.

Additional processing to produce C-4 would increase separate costs by $5.80 per kilogram.

Assuming no other changes, what is the amount of joint cost applicable to product C-4 using the NRV method? Using the incremental analysis method, determine if ABC Corporation should produce C-4?