Milj-Spe AS produces two joint products, cooking oil and soap oil, from a single vegetable oil refining

Miljø-Såpe AS produces two joint products, cooking oil and soap oil, from a single vegetable oil refining process. In July 2022, the joint costs of this process were NOK 24 000 000. Separable processing costs beyond the split-off point were cooking oil, NOK 30 000 000; and soap oil, NOK 7 500 000. Cooking oil sells for NOK 50 per drum. Soap oil sells for NOK 25 per drum. Miljø-Såpe produced and sold 1 000 000 drums of cooking oil and 500 000 drums of soap oil. There are no beginning or ending stocks of cooking oil or soap oil.

Required

Allocate the NOK 24 000 000 joint costs using the estimated NRV method.