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Gay Mills produces lumber in three sizes. The production manager is considering processing them farther by adding specific decorative finishes. The relevant information is listed

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Gay Mills produces lumber in three sizes. The production manager is considering processing them farther by adding specific decorative finishes. The relevant information is listed below: Sales value at Production Additional Product Final sales Split off per Processing (board feet) Value per unit unit Cost per unit Siding 1,626,750 $1.15 50.30 $1.55 Flooring 4,387,500 $1.75 $0.70 $2.70 Studs 1.154,250 $0.85 $0.20 $1.10 The joint cost for Guy Mills is $ 1,450,000. In order for Guy Mills to determine whether they should process further they need to allocate the joint costs using the net realizab method. Using the NRV method complete the table below to allocate the joints cost to Siding, Flooring and Studs. Siding Flooring Studs Net realizable $ value $ Weighting Joint costs allocated Which products should Guy Products process farther? Siding Flooring Incremental Revenue Studs Additional processing costs Increase/ (decrease) in income

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