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Crane 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. $494,000 (includes timber logs) Joint process costs Quantities produced 94,000 board feet of hardwood lumber 18,000 board feet of low-grade lumber Sales prices at split-off $7.40 per board foot for hardwood lumber $2.60 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%.) Hardwood Low-Grade Totals Allocated joint costs Gross margin Gross margin percentages eTextbook and Media Save for Later +A +A de +A A Attempts: 0 of 3 used de % Submit Answer

Crane 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. $494,000 (includes timber logs) Joint process costs Quantities produced 94,000 board feet of hardwood lumber 18,000 board feet of low-grade lumber Sales prices at split-off $7.40 per board foot for hardwood lumber $2.60 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%.) Hardwood Low-Grade Totals Allocated joint costs Gross margin Gross margin percentages eTextbook and Media Save for Later +A +A de +A A Attempts: 0 of 3 used de % Submit Answer

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: 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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Crane 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. $494,000 (includes timber logs) Joint process costs Quantities produced 94,000 board feet of hardwood lumber 18,000 board feet of low-grade lumber Sales prices at split-off $7.40 per board foot for hardwood lumber $2.60 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%.) Hardwood Low-Grade Totals Allocated joint costs Gross margin Gross margin percentages eTextbook and Media Save for Later +A +A de +A A Attempts: 0 of 3 used de % Submit Answer
Transcribed Image Text:Crane 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. $494,000 (includes timber logs) Joint process costs Quantities produced 94,000 board feet of hardwood lumber 18,000 board feet of low-grade lumber Sales prices at split-off $7.40 per board foot for hardwood lumber $2.60 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%.) Hardwood Low-Grade Totals Allocated joint costs Gross margin Gross margin percentages eTextbook and Media Save for Later +A +A de +A A Attempts: 0 of 3 used de % Submit Answer
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