Sarmax Manufacturing Sdn. Bhd. uses a joint production process that produces three products at the split-off point. Joint production costs during January were RM720,000. The company uses the net realizable value method for allocating joint costs. Product information for January was as follows

	Product
	R1			S2			T3
Litres produced		2,500			5,000			7,500
Sales prices per gallon:
At the split-off	RM	100		RM	80		RM	20
After further processing	RM	150		RM	115		RM	30
Costs to process after split-off	RM	150,000		RM	150,000		RM	100,000

Required:

1. Assume that all three products are main products and that they can be sold at the split-off point or processed further, whichever is economically beneficial to Sarmax. Allocate the joint costs to the three products using the net realizable value method.

(6 marks)

2. Assume that Sarmax uses the physical quantities method to allocate the joint costs. Calculate the amount that would be allocated to each of the three products.

(3 marks)