Carson Wood Products Processes Logs into Four Grades of Lumber

question 45

Multiple Choice

Carson Wood Products processes logs into four grades of lumber totaling 500,000 board feet as follows at a joint cost of $300,000: $$\begin{array} { l c c } \text { Grade } & \text { Board Feet } & \text { Final Sales Value } \\\text { First and second } & 75,000 & \$ 56,250 \\\text { No. } 1 \text { common } & 200,000 & 180,000 \\\text { No. } 2 \text { common } & 100,000 & 105,000 \\\text { No. } 3 \text { common } & 125,000 & 127,500\end{array}$$ What amount of joint costs will be allocated to No. 2 common using the constant gross margin percentage method?

• A)$300,000
• B)$67,200
• C)$37,800
• D)$192,000

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Definitions:

Regression Model

A statistical model that estimates relationships among variables, typically one dependent variable and one or more independent variables, to predict or explain outcomes.

Dummy Variable

A binary variable used in regression models to represent categorical data by encoding categories as 0 or 1.

Indicator Variable

A variable that takes the value of 1 if a certain condition is true and 0 if it is not.

Dependent Variable

The variable in an experiment or study that is expected to change in response to changes in the independent variable.