QUESTION 1 An independent timber contractor supplies logs to Kayu Sempurna Bhd. (KSB) and KSB processes them into three different types of lumber products.: ? Decorative items (fireplace mantels, beams for ceilings) ? Posts that are used as support braces (mine support braces, braces for exterior fences on ranch properties) ? Residential building studs (walls, ceilings) These products are the result of a joint sawmill process that includes removing the bark from the logs, cutting the logs into workable lengths (ranging from 8 to 16 feet), and then cutting the individual products from the logs. The joint process results in the following costs of products for a typical month:

The joint process results in the following costs of products for a typical month: RM Direct materials (rough timber logs) 560,000 Debarking (labour and overhead) 50,000 Sizing (labour and overhead) 170,000 Product cutting (labour and overhead) 230.000 Total joint costs 1.010.000 Product yields and average sales values on a per-unit basis from the joint process are as follows: Product Monthly Output of Materials at Splitoff Fully Processed Selling Point Price (RM) Decorative items 5,500 units 85 Posts 18,500 units 25 Studs 77,000 units 5