How to remove attached materia?

[Rau]

You get the materia back but lose the item. Just re-emphazing that point.

Question though, If you get 100% SB with an item that has materia in it, and you turn it into materia do you get a higher grade materia from it?
i.e. Materia Grade 1 + level 10ish items (that always yield grade 1 materia) = grade 2 materia?

you lose the item?! really? that's so much better than losing materia