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Please answer question attached. 1. (25 pts) Sawgrass Sawmill manufactures two lumber products from a joint milling process. The two products developed are mine support
Please answer question attached.
1. (25 pts) Sawgrass Sawmill manufactures two lumber products from a joint milling process. The two products developed are mine support braces (MSBs) and unseasoned commercial building lumber (CBL). A standard production run incurs joint costs of $300,000 and results in 60,000 units of MSB and 90,000 units of CBL. Each unprocessed unit of MSB sells for $2 per unit and each unprocessed unit of CBL sells for $4 per unit. If the CBL is processed further at a cost of $200,000, it can be sold at $10 per unit but 10,000 units are unavoidably lost (with no discernible value). The MSB units can be coated with a preservative at a cost of $100,000 per production run and then sold for $3.50 each. Required: a. Should MSB and/or CBL be processed further or sold immediately after initial milling? b. Given your decision in (a.), prepare a schedule computing the completed cost assigned to each batch of MSB and CBL. Use net realizable value for allocating joint costsStep by Step Solution
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