The Assam Oil Company Ltd. processes crude oil in Department 1. During the current period, the following

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The Assam Oil Company Ltd. processes crude oil in Department 1. During the current period, the following costs were incurred in Department 1 to obtain 20,000 barrels of product A and 30,000 barrels of product B:image text in transcribed

Product A could be sold at the split-off point for ₹5 per barrel or processed in Department 2 at an additional cost of ₹4 per barrel and then sold for ₹10 per barrel. During the current period, all 20,000 barrels of A were processed in the Department. There was an ending inventory of 5,000 barrels of product A.
Product B must be processed further in Department 3. The following information from the current period is available about Department 3: Barrels processed, 31,000; Costs, ₹3,10,000.
The figure of 31,000 barrels includes 1000 barrels from the previous period’s production of Department 1 processed in this period. There is an ending inventory of 1,000 barrels of B. The selling price of B is ₹20 per barrel.
You are required to determine to cost of ending finished inventories, using the net realisable value method to allocate the joint costs.

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