Lynnfield Lumber Inc. (Lynnfield) 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, 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.) The studs are sold as rough-cut lumber after emerging from the sawmill operation without further processing by Lynnfield. Also, the posts require no further processing beyond the splitoff point. The decorative pieces must be planed and further sized after emerging from the sawmill. This additional processing costs $115,000 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 $65 per unit. Required Requirement 1a. Allocate the joint processing costs of $1,050,000 to the three products using the sales value at splitoff method. (Round the weightings to four decimal places.) Monthly unit output Selling price per unit Sales value of total production at splitoff Weighting Joint costs allocated Per-unit information Studs Decorative pieces Posts Total Required Joint cost information The joint process results in the following costs of products for a typical month: Direct materials (rough timber logs) Debarking (labour and overhead) $ 505,000 65,000 Sizing (labour and overhead) 220,000 260,000 Product cutting (labour and overhead) Total joint costs $ 1,050,000 Product yields and average sales values on a per-unit basis from the joint process are as follows: Product Monthly Output of Materials at Fully Processed Splitoff Point Selling Price Studs 74,000 units $ 5 Decorative pieces 2,000 units 115 Posts 24,000 units 18 1. Based on the information provided for Lynnfield Lumber, allocate the joint processing costs of $1,050,000 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 that compares processing the decorative pieces further, as is current practice, with selling them as a rough-cut product immediately at splitoff. 3. Assume the company announced that in six months it will sell the unfinished decorative pieces at splitoff due to increasing competitive pressure. Identify at least three types of likely behaviour that will be demonstrated by the skilled labour in the planing-and-sizing process as a result of this announcement. Include in your discussion how this behaviour could be influenced by