Qayqayt PaperProducts Inc. processes wood pulp into two products. During January the joint costs of processing were $144,000. Production and sales value information for the month were as follows:

Sales Value at

ProductKilograms Produced Split off PointSeparable Costs

Paper130,000$80,000$224,000

Basic Cardboard108,000 70,000 264,000

Paper sells for $2.75 a kilogram and cardboard sells for $3.50 a kilogram. There were no beginning inventories for April but ending inventories totaled 10,000 kilograms for paper and 12,000 kilograms for cardboard.

required:-

Allocate the joint (common) costs to both product groups and prepare a product line operating income statement using the net realizable value method