Syarikat Penapisan Petroleum Berhad produces three joint products; Gasoline, Kerosene dan Diesel; and byproduct, i.e. Tar in the same refinery process. The split-off point incurred after the processing in the main Refinery Department ended. Gasoline and Kerosene are further processes before they can be sold. The following is cost information for December 2017:

Costs in the main Refinery Department:

Direct materialRM50,000

Direct labourRM20,000

Manufacturing overheadRM10,000

Production units

Gasoline25,000 barrels

Kerosene20,000 barrels

Diesel15,000 barrels

Tar11,250 barrels

Further process costs:

Gasoline RM3,750

Kerosene RM2,000

Tar RM1,000

Sales price of joint products:

GasolineRM1.75 per barrel (after further process)

KeroseneRM2.50 per barrel (after further process)

DieselRM3.00 per barrel (at split off point)

Estimated sales value of Tar, RM12,000.

Administrative and marketing expenses for Tar, RM3,000.

Net sales of Tar is used to reduce joint costs.

Required:

a)Calculate the joint costs to be allocated to joint products.

b)Allocate joints costs according to:

i)Physical unit measure method

ii)Net realisable value method

iii)Gross margin percentage method

c) Currently, the company is considering to further process Diesel with additional costs of RM20,000. The output of the additional process can be sold at the prices of RM5.25 per barrels. Should the company continue with this proposal?