Question

A lumber mill bought a shipment of logs for $40,000. 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.
Type 1400,000 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.$16,000; $16,000.
B.$13,333; $4,444.
C.$40,000; $24,000.
D.$24,000; $12,000.
E.$24,000; $8,000.

Answer

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