Question

Suppose that a sawmill processes logs into four grades of lumber totaling 500,000 board feet as follows at a joint cost of $300,000: Grade Board Feet Final Sales Value First and second 75,000 $ 56,250 No. 1 common 200,000 180,000 No. 2 common 100,000 105,000 No. 3 common 125,000 127,500 What amount of joint costs will be allocated to first and second using the physical units method? a. $300,000 b. $36,000 c. $225,000 d. $45,000

Answer 1