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...

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:

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 productA. 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.