Problem - Oregon Lumber processes timber into four products. During January, the joint costs of processing were $5,000. There was no inventory at the beginning of the month. Production and sales value information for the month is as follows:
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|
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Sales Value at
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Product
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Board feet
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Splitoff Point
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Ending Inventory
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2 x 4's
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50,000
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$0.20 per board foot
|
3,000 bdft.
|
|
2 x 6's
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30,000
|
0.30 per board foot
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1,000 bdft.
|
|
4 x 4's
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40,000
|
0.25 per board foot
|
5,000 bdft.
|
|
Slabs
|
10,000
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0.10 per board foot
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3,000 bdft.
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Determine the value of ending inventory if the sales value at split-off method is used for product costing. Round to 3 decimal places when necessary.