The studs are sold as rough$-$cut lumber after emerging from the sawmill operation without further processing by SSI. Also, the posts require no further processing. The

decorative pieces must be planed and further sized after emerging from the SSI sawmill. This additional processing costs SSI $$120,000$ per month and normally results in

a loss of $10$ percent of the units entering the process. Without this planing and sizing process, there is still an active intermediate market for the unfinished decorative

pieces where the sales price averages $$60$ per unit.

Required:

Based on the information given for Sonimad Sawmill, Inc., allocate the joint processing costs of $$990,000$ to each of the three product lines using the:

a$.$ Relative sales$-$value$-$at$-$split$-$off method. When required, round decimal values to four places before converting to a percentage. For example, $88349$

would be rounded to $\mathrm{.}8835$ and entered as $"88\mathrm{.}35"$ percent.

$($Note: Difference due to rounding.$)$

b$.$ Physical units method at split$-$off. b$.$ Physical units method at split$-$off.

Allocated Joint

c$.$ Estimated net realizable value method. When required, round decimal values to four places before converting to a percentage. For example, $88349$ woul

be rounded to $\mathrm{.}8835$ and entered as $"88\mathrm{.}35"$ percent.

$($Note: Difference due to rounding.$)$ Prepare an analysis for Sonimad Sawmill, Inc., to compare processing the decorative pieces further as it presently does, with selling the rough$-$cut product immediately

at split$-$off.

Sonimad Sawmill, Inc.

Analysis ReportPhysical Units Method, Relative Sales$-$Value$-$at$-$Split$-$off Method, Net Realizable Value Method, Decision Making

Sonimad Sawmill, Inc. $($SSI$),$ purchases logs from independent timber contractors and processes them into the following three types of lumber products:

Studs for residential construction $($e$.$g$.,$ walls and ceilings$)$

Decorative pieces $($e$.$g$.,$ fireplace mantels and beams for cathedral ceilings$)$

Posts used as support braces $($e$.$g$.,$ mine support braces and braces for exterior fences around ranch properties$)$

These products are the result of a joint sawmill process that involves removing bark from the logs$,$ cutting the logs into a workable size $($ranging from $8$ to $16$ feet in

length$),$ and then cutting the individual products from the logs$,$ depending upon the type of wood $($pine$,$ oak, walnut, or maple$)$ and the size $($diameter$)$ of the log$.$

The joint process results in the following costs and output of products during a typical month:

Product yield and average sales value on a per$-$unit basis from the joint process are as follows: