Figure 6-6
Suppose That a Sawmill Processes Logs into Four

question 11

Multiple Choice

Figure 6-6
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: $$\begin{array} { l c c } \text { Grade } & \text { Board Feet } & \text { Final Sales Value } \\\text { First and second } & 75,000 & £ 56,250 \\\text { No. } 1 \text { common } & 200,000 & 180,000 \\\text { No. } 2 \text { common } & 100,000 & 105,000 \\\text { No. } 3 \text { common } & 125,000 & 127,500\end{array}$$
-Refer to Figure 6-6. What amount of joint costs will be allocated to No. 2 common using the constant gross margin percentage method?

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

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Definitions:

Noise Disturbance

Any excessive or annoying sound that disrupts the peace and tranquility of the surrounding environment.

Leasehold Estate

An interest in real property allowing the holder to use and occupy the land or property for a specific period, under a lease agreement.

Freehold Estate

A type of real property ownership where the owner has indefinite duration of ownership rights, including the land and buildings.

Life Estate

A property interest that lasts for the lifetime of a specific individual, after which the property passes to another recipient.