Item 25

Item 25

A lumber mill bought a shipment of logs for $58,000. 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. (Do not round your intermediate calculations.)

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.

Multiple Choice

• $58,000; $24,000.
• $34,800; $17,400.
• $10,944;$5,800.
• $24,000; $8,000.
• $16,000; $16,000.