Carina 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,$ Carina 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 $(10$ Marks$)$

b$.$ NRV method $(10$ Marks$)$

$2.$ Should Carina have processed each of the products further? What effect does the allocation

method have on this decision? $(20$ Marks$)$