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Problem - Oregon Lumber processes timber into four products. During January, the joint costs of processing were $5,000. There was no inventory at the beginning of the month. Production and sales value information for the month is as follows:
Sales Value at
Product
Board feet
Splitoff Point
Ending Inventory
2 x 4's
50,000
$0.20 per board foot
3,000 bdft.
2 x 6's
30,000
0.30 per board foot
1,000 bdft.
4 x 4's
40,000
0.25 per board foot
5,000 bdft.
Slabs
10,000
0.10 per board foot
Determine the value of ending inventory if the sales value at split-off method is used for product costing. Round to 3 decimal places when necessary.
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