ACCT 3104 workshopTwo questions sem 2 2009

ACCT 3104 workshopTwo questions sem 2 2009 - Workshop 2...

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Workshop 2 31 st August 2009 ACCT 3104 Question One Sharpless Sawmill Inc purchases logs from independent timber contractors and processes the logs into three types of lumber products: Studs for residential buildings Decorative pieces Posts These products are the result of a joint sawmill process that involves removal of bark from the logs, cutting the logs into workable size and then cutting the individual products from the logs. The joint process results in the following costs of products for a typical month: Direct materials $600 000 Debarking $60 000 Sizing $240 000 Product cutting $300 000 Total joint costs $1 200 000 Product yields and average sales values on a per-unit basis from the joint process are as follows: Product Monthly output of material at Splitoff Point Monthly Sales Material at Split off Point Fully Processed Selling Price Studs 95 000 units 80 000 units $10 Decorative Pieces 10 000 units 9 000 units $120 Posts 25 000 units 23 000 units $30 The studs and posts are sold after emerging from the sawmill operation without further processing. The decorative pieces requires further processing after splitoff at a cost of $120 000 per month and normally results in a loss of 10% of the units entering the process. Without this further processing there is still an active intermediate market
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This note was uploaded on 08/30/2009 for the course BUSINESS ACCT3104 taught by Professor Sandra during the Spring '09 term at École Normale Supérieure.

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ACCT 3104 workshopTwo questions sem 2 2009 - Workshop 2...

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