Langholmen-Sverige AB crushes and refines mineral ore into three products in a joint-cost operation. Costs and production for 2022 were as follows:

better off by selling Vätervik that way or processing it through Department 3 and selling it?
Show computations to support your answer. Disregard all other factors not mentioned in the problem.

Transcribed Image Text:

Department 1, at initial joint costs of SKr 420 000, produces 20 000 kg of Vadstena, 60 000 kg of Vttervik and 100 000 kg of Birgitta. Department 2 processes Vadstena further at a cost of SKr 100 000. Department 3 processes Vttervik further at a cost of SKr 200 000. Results for 2022 are: Vadstena: 20 000 kg completed; 19 000 kg sold for SKr 20 per kg; closing stock, 1000 kg. Vttervik: 60 000 kg completed; 59 000 kg sold for SKr 6 per kg; closing stock, 1000 kg. Birgitta: 100 000 kg completed; 99 000 kg sold for SKr 1 per kg; closing stock, 1000 kg; Birgitta required no further processing. Required 1 Use the estimated NRV method to allocate the joint costs of the three products. Calculate the total costs and unit costs of closing stock. 2 Calculate the individual gross-margin percentages of the three products. 3 Suppose Langholmen-Sverige receives an offer to sell all of its Vtervik product for a price of SKr 2 per kg at the split-off point before going through Department 3, just as it comes off the production line in Department 1. Using last year's figures, would Langholmen-Sverige be