Current Attempt in Progress Skysong Sawmill Co. runs rough logs through its cutting facility for the primary purpose of producing hardwood lumber. In this process, however, not all of the wood is of high enough quality to be sold as hardwood lumber. The other joint product, lower-grade lumber, has been sold as-is to other manufacturers to make wood pallets. Last year, the following quantities and sales prices were reported. Joint process costs Quantities produced $480,000 (includes timber logs) 100,000 board feet of hardwood lumber 22,000 board feet of low-grade lumber Sales prices at split-off $7.80 per board foot for hardwood lumber $2.50 per board foot for low-grade lumber Paul, the sawmill owner, is meeting with other top managers as they consider avenues for increased profitability. They recognize that selling the lower-grade wood to other companies has certainly helped the mill's bottom line. However, they wonder if they could further process this wood themselves and make even more of a return. (a) Determine the gross margin levels and percentages Paul is looking at for last year's results (assume all products produced were sold). Use the sales value at split-off method to allocate joint costs. (Round proportion to 4 decimal places, e.g. 0.2516, allocated joint costs and gross margin to O decimal places, e.g. 5,125 and gross margin percentage to 2 decimal places, e.g. 15.25%.) Allocated joint costs Gross margin Gross margin percentages eTextbook and Media Hardwood % de +A +A $ Low-Grade % LA Totals %
Current Attempt in Progress Skysong Sawmill Co. runs rough logs through its cutting facility for the primary purpose of producing hardwood lumber. In this process, however, not all of the wood is of high enough quality to be sold as hardwood lumber. The other joint product, lower-grade lumber, has been sold as-is to other manufacturers to make wood pallets. Last year, the following quantities and sales prices were reported. Joint process costs Quantities produced $480,000 (includes timber logs) 100,000 board feet of hardwood lumber 22,000 board feet of low-grade lumber Sales prices at split-off $7.80 per board foot for hardwood lumber $2.50 per board foot for low-grade lumber Paul, the sawmill owner, is meeting with other top managers as they consider avenues for increased profitability. They recognize that selling the lower-grade wood to other companies has certainly helped the mill's bottom line. However, they wonder if they could further process this wood themselves and make even more of a return. (a) Determine the gross margin levels and percentages Paul is looking at for last year's results (assume all products produced were sold). Use the sales value at split-off method to allocate joint costs. (Round proportion to 4 decimal places, e.g. 0.2516, allocated joint costs and gross margin to O decimal places, e.g. 5,125 and gross margin percentage to 2 decimal places, e.g. 15.25%.) Allocated joint costs Gross margin Gross margin percentages eTextbook and Media Hardwood % de +A +A $ Low-Grade % LA Totals %
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter25: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 4CMA: Oakes Inc. manufactured 40,000 gallons of Mononate and 60,000 gallons of Beracyl in a joint...
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