Please show work. Need to learn how to use split off method Oregon Lumber proces
ID: 2364652 • Letter: P
Question
Please show work. Need to learn how to use split off method Oregon Lumber processes timber into four products. During January, the joint costs of processing were $280,000. 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 6,000,000 $0.30 per board foot 500,000 bdft. 2 x 6's 3,000,000 0.40 per board foot 250,000 bdft. 4 x 4's 2,000,000 0.45 per board foot 100,000 bdft. Slabs 1,000,000 0.10 per board foot 50,000 bdft. Question: Determine the value of ending inventory if the sales value at splitoff method is used for product costing. Round to three decimal places when necessary.Explanation / Answer
Product 2 x 4's 2 x 6's 4 x 4's Slabs
Totals Board feet 6,000,000 3,000,000 2,000,000 1,000,000
Sales Value $1,800,000 1,200,000 900,000 100,000 $4,000,000
Fraction of Prod. in Inventory 500,000/6,000,000 x 250,000/3,000,000 x 100,000/2,000,000 x 50,000/1,000,000 x
Percent 45.0% x 30.0 x 22.5 x 2.5 x 100.0%
Joint Cost $280,000 280,000 280,000 280,000
Allocated $126,000 84,000 63,000 7,000 $280,000
Board feet 6,000,000 3,000,000 2,000,000 1,000,000
Sales Value at Splitoff Point Ending Inventory $0.30 per board foot 500,000