(Cost accounting) What is the best way to apportion

Constant Gross Margin % NRV Method Allocate joint costs so that the gross margin % for each product is the same Cream Processing ? Butter $500 $280 Raw Milk 25 units $400 Skim Processing Condensed ? $520 Milk $1,100 Split-off 75 units Point Butter Condensed Cream Milk Total Total final sales value $1,600 Joint and separable costs 1,200 Gross margin $400 Gross margin % 25% Final sales value $500 $1,100 $1,600 Gross margin @ 25% 125 275 400 Imputed total costs 375 825 1,200 Separable costs 280 520 800 Allocated joint costs $ 95 $ 305 $400 7 Sales Value at Splitoff Method Allocate joint costs to products based on their relative value at the split-off point Processing $280 Butter $500 Raw Milk $400 Cream $200 25 units Skim $300 75 units Processing $520 Condensed Milk $1,100 Split-off Point Cream Skim Total Sales value at split-off Weighting Joint costs allocated $200 40% $160 $300 60% $240 $500 100% $400 5 Net Realizable Value (NRV) Method Allocate joint costs to products based on their estimated final selling prices less separable processing costs Cream ? 25 units Processing $280 Butter $500 Raw Milk $400 Skim ? 75 units Processing $520 Condensed Milk $1,100 Split-off Point Final sales value Separable processing costs Net realizable value Weighting Joint cost allocation Cream $500 280 220 27.5% $110 Skim $1,100 520 580 72.5% $290 Total $1,600 800 800 100% $400