A Lumber Mill Bought a Shipment of Logs for $40,000

question 101

Multiple Choice

A lumber mill bought a shipment of logs for $40,000.When cut,the logs produced a million board feet of lumber in the following grades.Compute the cost to be allocated to Type 1 and Type 2 lumber,respectively,if the value basis is used. 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.

• A)$16,000;$16,000.
• B)$13,333;$4,444.
• C)$40,000;$24,000.
• D)$24,000;$12,000.
• E)$24,000;$8,000.

Understand the concept of price discrimination and its impact on profits.

Grasp the relationship between elasticity of demand and price discrimination.

Identify the conditions under which price discrimination increases producer surplus.

Differentiate between scenarios of legal and illegal price discrimination.

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Definitions:

Performance Review

A formal assessment in which the work performance of an employee is documented and evaluated, usually on an annual basis.