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Problem 17-27 Joint Costs (LO 17-4, 17-5) [The following information applies to the questions displayed below.] Snake River Sawmill manufactures two lumber products from a
Problem 17-27 Joint Costs (LO 17-4, 17-5)
[The following information applies to the questions displayed below.]
Snake River Sawmill manufactures two lumber products from a joint milling process. The two products developed are mine support braces (MSB) and unseasoned commercial building lumber (CBL). A standard production run incurs joint costs of $460,000 and results in 76,000 units of MSB and 106,000 units of CBL. Each MSB sells for $2, and each unit of CBL sells for $10.
Problem 17-27 Part 3
- Assume the commercial building lumber is not marketable at split-off but must be further planed and sized at a cost of $543,400 per production run. During this process, 11,600 units are unavoidably lost; these spoiled units have no value. The remaining units of commercial building lumber are saleable at $10.00 per unit. The mine support braces, although saleable immediately at the split-off point, are coated with a tarlike preservative that costs $260,000 per production run. The braces are then sold for $13.00 each. Using the net-realizable-value basis, compute the completed cost assigned to each unit of commercial building lumber. (Round the calculation of "Relative Proportion" to the nearest whole percent. Round your final answer to 2 decimal places.)
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