Solution-Compute the December gross margin for Bishop Falls

Compute the December gross margin for Bishop Falls

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Reference no: EM132745516

Problem - The Bishop's Falls Lumber Corporation harvests lumber and prepares it for sale to wholesalers of lumber and wood products. The main product is finished lumber, which is sold to wholesale construction suppliers. A by-product of the process is wood pellets, which are sold to wholesalers of wood pellet stoves. During December, the manufacturing process incurred $1,062,400 in total costs; 256,000 board feet of lumber were produced and sold along with 64,000 pounds of pellets. The finished lumber sold for $10 per board foot and the pellets sold for $4 per 100-pound bag. There were no beginning or ending inventories.

Required -

a. Compute the December gross margin for Bishop's Falls Lumber Corporation assuming that by-product revenues reduce joint production costs.

b. Compute December gross margin if by-products are accounted for as Other Revenue when sold?

Reference no: EM132745516

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Compute the December gross margin for Bishop Falls

Reference no: EM132745516

Reference no: EM132745516

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