Reference no: EM132973547

A lumber mill paid $120,000 for logs that produced 125,000 board feet of lumber in 3 different grades and amounts as follows:

Grade Production Market Price

Structural16,000 board feet $3,000/1,000 bd. ft. No. 1

Common44,000 board feet $1,600/1,000 bd. ft. No. 2

Common65,000 board feet $640/1,000 bd. ft.

Problem 1: Compute the portion of the $120,000 joint cost to be allocated to No. 2 Common if the value basis is used.

Multiple Choice

Option 1: $40,000.
Option 2: $0.
Option 3: $60,000.
Option 4: $120,000.
Option 5: $31,200.