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A Sawmill Bought a Shipment of Logs for $40,000  Type 1  Type 2 \text { Type 1 } \quad \text { Type 2 }

question 105

Multiple Choice

A sawmill bought a shipment of logs for $40,000. When cut, the logs produced a million board feet of lumber in the following grades:
Type 1 - 400,000 bd. ft. priced to sell at $0.12 per bd. ft.
Type 2 - 400,000 bd. ft. priced to sell at $0.06 per bd. ft.
Type 3 - 200,000 bd. ft. priced to sell at $0.04 per bd. ft.
 Type 1  Type 2 \text { Type 1 } \quad \text { Type 2 }
(A) $16,000$16,000\$ 16,000 \quad \$ 16,000
(B) $13,333$4,444\$ 13,333 \quad \$ 4,444
(C) $40,000$24,000\$ 40,000 \quad \$ 24,000
(D) $24,000$12,000\$ 24,000 \quad \$ 12,000
(E) $24,000$8,000\$ 24,000 \quad \$ 8,000
How much cost should be allocated to Type 1 and Type 2, respectively?

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Definitions:

Enhance Existing Organization

A cognitive process that involves integrating new information into already existing frameworks or structures of knowledge.

Garcia And Garcia y Robertson

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The process of acquiring new understanding, knowledge, behaviors, skills, values, attitudes, or preferences through experience, study, or teaching.

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