Castle Falls Co. processes peanuts into peanut butter and peanut oil. The normal volume of peanuts that can be processed per month is 30,000 pounds. Including the cost of peanuts, the variable cost in the crushing process is $0.60/lb. The monthly fixed costs are $5,000 for the crushing department.

The crushing process yields 70% "paste", 20% oil, and 10% waste. The paste is mixed with butter in the mixing department to obtain peanut butter. A pound of paste is mixed with 0.2 pounds of butter to obtain 1.2 pounds of peanut butter. Including the butter, the variable cost of processing a pound of peanut butter in the mixing department is $0.25. (Note: this is per lb. of peanut butter, not per lb. of paste.) The mixing department's fixed cost is $2,100 per month.

The oil must be pasteurized and bottled. The variable cost of bottling amounts to $0.45/lb. Bottling's fixed costs are $700 per month. Peanut butter sells for $1.40/lb. and peanut oil for $1.62/lb.

Use the NRV method to determine the amount of joint cost that would be assigned to the output from a 30,000 pound batch.

To peanut butter: To peanut oil: