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Bramble Sawmill Co . runs rough logs through its cutting facility for the primary purpose of producing hardwood lumber. In this process, however, not all
Bramble Sawmill Co runs rough logs through its cutting facility for the primary purpose of producing hardwood lumber. In this process, however, not all of the wood is of high enough quality to be sold as hardwood lumber. The other joint product, lowergrade lumber, has been sold asis to other manufacturers to make wood pallets. Last year, the following quantities and sales prices were reported.
tableJoint process costs,$includes timber logsQuantities produced,board feet of hardwood lumberboard feet of lowgrade lumberSales prices at splitoff,$per board foot for hardwood lumber$per board foot for low rade lumber
Paul, the sawmill owner, is meeting with other top managers as they consider avenues for increased profitability. They recognize that selling the lowergrade wood to other companies has certainly helped the mill's bottom line. However, they wonder if they could further process this wood themselves and make even more of a return.
a
Determine the gross margin levels and percentages Paul is looking at for last year's results assume all products produced were sold Use the sales value at splitoff method to allocate joint costs. Round proportion to decimal places, eg allocated joint costs and gross margin to decimal places, eg and gross margin percentage to decimal places, eg
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