Suppose That a Sawmill Processes Logs into Four Grades of Lumber

question 60

Multiple Choice

Suppose that a sawmill processes logs into four grades of lumber totalling 500,000 board metres as follows at a joint cost of $300,000: $$\begin{array} { l c c } \text { Grade } & \text { Bard Metres } & \text { Final sales Value } \\\hline \text { First and second } & 75,000 & \$ 56,250 \\\mathrm { No. } \quad1 \mathrm { common } & 200,000 & 180,000 \\\mathrm { No.\quad2 } \mathrm { common } & 100,000 & 105,000 \\\mathrm { No. }\quad 3 \mathrm { common } & 125,000 & 127,500\end{array}$$ What amount of joint costs will be allocated to first and second using the physical units method?

• A)$36,000
• B)$45,000
• C)$225,000
• D)$300,000

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