Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Northwest Building Products (NBP) manufactures two lumber products from a joint milling process: residential building lumber (RBL) and commercial building lumber (CBL). A standard production

image text in transcribed
Northwest Building Products (NBP) manufactures two lumber products from a joint milling process: residential building lumber (RBL) and commercial building lumber (CBL). A standard production run incurs joint costs of $522,000 and results in 92,800 units of RBL and 139,200 units of CBL. Each RBL sells for $10 per unit and each CBL sells for $12 per unit. Required: 1. Assuming that no further processing occurs after the split-off point, how much of the joint costs are allocated to commercial lumber (CBL) on a physical measure method basis? 2. If no further processing occurs after the split-off point, how much of the joint cost is allocated to the residential lumber (RBL) using a sales value at split-off method? 3. Assume that the CBL is not marketable at split-off but must be planed and sized at a cost of $348,000 per production run. During this process, 11,600 units are unavoidably lost and have no value. The remaining units of CBL are salable at $14 per unit. The RBL, although salable immediately at the split-off point, is coated with a tarlike preservative that costs $232,000 per production run. The RBL is then sold for $12 each. Using the net realizable value basis, how much of the completion costs should be assigned to each unit of CBL? 4. Based on information in requirement 3 , should NBP choose to process RBL beyond split-off? Complete this question by entering your answers in the tabs below

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Management A Strategic Emphasis

Authors: Edward Blocher, David E. Stout, Gary Cokins, Kung Chen

4th Edition

0073128155, 978-0073128153

More Books

Students also viewed these Accounting questions