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Sawmill, Inc. processes wood pulp into three grades of plywood: Hardwood, Softwood, and Decorative. Each grade of plywood may be sold as is at the
Sawmill, Inc. processes wood pulp into three grades of plywood: Hardwood, Softwood, and Decorative. Each grade of plywood may be sold as is at the split-off point or processed further to a higher grade of product, with the price and cost information shown below. The joint processing cost to get the wood pulp to split-off is $16,000. Sawmill, Inc. desires to maximize its profit by making an optimal sell-or-process-further decision for each grade of plywood, and also allocate its joint costs according to such decisions. Selling price Cost after per board-feet split-off Selling price Board-feet per board-feet Product produced feet) after split-off at split-off Sper board- 2,500 $5.5 $2.0 Hardwood $8.0 3,000 3.0 1.5 Softwood 5.0 4,500 7.0 3.5 Decorative 10.0 How much joint cost would be allocated to Hardwood plywood if the Sales Value at Split-Off method was used (Round numbers to 4 decimal places if needed & choose the closest value to your answer!)? $4,056.0 $4,000.0 $4,812.8 $2.654.4
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