Doughty Sawmill, Inc., (DSI), purchases logs from independent timber contractors and processes the logs into three types of lumber products. These products are the result of a joint sawmill process that involves removal of bark from the logs, cutting the logs into a workable size (ranging from 8 to 16 feet in length), and then cutting the individual products from the logs. (Click the icon to view the joint cost information.) (Click the icon to view the per-unit information.) (Click the icon to view additional information.) Read the requirements Requirement 1. Based on the information given for Doughty Sawmill, allocate the joint processing costs of $1,000,000 to the three products using the (a) Sales value at splitoff method, (b) Physical-measure method (volume in units), and (c) NRV method. a. Begin by allocating the joint processing costs of $1,000,000 to the three products using the Sales value at splitoff method. (Round the weights to four decimal places.) Joint Cost Information Per Unit Information Product yields and average sales values on a per-unit basis from the joint process are as follows: Selling price per unit Additional Information splitoff Woighting The studs are sold as rough-cut lumber after emerging from the aiwmill operation without furthor processing by Doughty Sawmill. Also, the posts require no further Joint costs allocated processing beyond the splitoff point. The decorative pieces must be planed and further sized after emerging from the sawmill. This additional processing costs $120,000 per month and normally results in a loss of 10% of the units entering the process. Without this planing and sizing process, there is still an active intermediate market for the unfinished decorative pieces in which the selling price averages $55 per unit. Requirements 1. Based on the information given for Doughty Sawmill, allocate the joint processing costs of $1,000,000 to the three products using: a. Sales value at splitoff method b. Physical-measure method (volume in units) c. NRV method 2. Prepare an analysis for Doughty Sawmill that compares processing the decorative pieces further, as it currently does, with selling them as a rough-cut product immediately at splitoff. 3. Assume Doughty Sawmill announced that in 6 months it will sell the unfinished decorative pieces at splitoff due to increasing competitive pressure. Select three types of likely behavior that will be demonstrated by the skilled labor in the planing-and-sizing process as a result of this announcement. How could this behavior be influenced by management? Doughty Sawmill, Inc., (DSI), purchases logs from independent timber contractors and processes the logs into three types of lumber products. These products are the result of a joint sawmill process that involves removal of bark from the logs, cutting the logs into a workable size (ranging from 8 to 16 feet in length), and then cutting the individual products from the logs. (Click the icon to view the joint cost information.) (Click the icon to view the per-unit information.) (Click the icon to view additional information.) Read the requirements Requirement 1. Based on the information given for Doughty Sawmill, allocate the joint processing costs of $1,000,000 to the three products using the (a) Sales value at splitoff method, (b) Physical-measure method (volume in units), and (c) NRV method. a. Begin by allocating the joint processing costs of $1,000,000 to the three products using the Sales value at splitoff method. (Round the weights to four decimal places.) Joint Cost Information Per Unit Information Product yields and average sales values on a per-unit basis from the joint process are as follows: Selling price per unit Additional Information splitoff Woighting The studs are sold as rough-cut lumber after emerging from the aiwmill operation without furthor processing by Doughty Sawmill. Also, the posts require no further Joint costs allocated processing beyond the splitoff point. The decorative pieces must be planed and further sized after emerging from the sawmill. This additional processing costs $120,000 per month and normally results in a loss of 10% of the units entering the process. Without this planing and sizing process, there is still an active intermediate market for the unfinished decorative pieces in which the selling price averages $55 per unit. Requirements 1. Based on the information given for Doughty Sawmill, allocate the joint processing costs of $1,000,000 to the three products using: a. Sales value at splitoff method b. Physical-measure method (volume in units) c. NRV method 2. Prepare an analysis for Doughty Sawmill that compares processing the decorative pieces further, as it currently does, with selling them as a rough-cut product immediately at splitoff. 3. Assume Doughty Sawmill announced that in 6 months it will sell the unfinished decorative pieces at splitoff due to increasing competitive pressure. Select three types of likely behavior that will be demonstrated by the skilled labor in the planing-and-sizing process as a result of this announcement. How could this behavior be influenced by management
