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:

Factory Machines

Durable, industrial equipment used in the manufacturing process, critical to producing goods and services.

Paper Cupcake Liners

Disposable paper molds used to line the cups of muffin tins to prevent cupcakes from sticking to the pan.

Managerial Accounting Reports

Managerial accounting reports are internal financial reports that are tailored to the specific informational needs of a company's management, providing detailed insights on operational performance, costs, budgeting, and decision-making analyses.

GAAP

Generally Accepted Accounting Principles, which are a set of rules and standards used in financial reporting.