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A lumber mill bought a shipment of logs for $58,000. When cut, the logs produced a million board feet of lumber in the following grades. Compute the cost to be allocated to Type 1 and Type 2 lumber, respectively, if the value basis is used. (Do not round your intermediate calculations.) Type 1 - 400,000 bd. ft. priced to sell at $0.12 per bd. ft. Type 2 - 400,000 bd. ft. priced to sell at $0.06 per bd. ft. Type 3 - 200,000 bd. ft. priced to sell at $0.04 per bd. ft.

a. $58,000; $24,000.
b. $34,800; $17,400.
c. $10,944;$5,800.
d. $24,000; $8,000.
e. $16,000; $16,000.

Respuesta :

Answer:

b. $34,800; $17,400.

Explanation:

The computation of the allocation cost is shown below:

For type 1:

= 400,000 × $0.12 per bd.ft

= $48,000

For type 2

= 400,000 × $0.06 per bd.ft

= $24,000

For type 2

= 200,000 × $0. p04er bd.ft

= $8,000

The For type 1

= $48,000 ÷ $80,000 × $58,000

= $34,800 would be

= $48,000 +$24,000 + $8,00

= $80,000

Now the allocation cost would be

For type 1

= Type 1 cost ÷ Total cost × shipment cost

= $48,000 ÷ $80,000 × $58,000

= $34,800

For type 2

= Type 2 cost ÷ Total cost × shipment cost

= $24,000 ÷ $80,000 × $58,000

= $17,400

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