Answer:
The multiple choices:
$35,000.
$23,333.
$70,000.
$17,500.
$0.
The fourth option,$17,500 allocated cost is the correct answer.
Explanation:
The joint cost of $70,000 can be apportioned between the logs of different grades using the sales price of each log as highlighted below:
The sales value of each =board feet*bd. ft
Structural market price =25,000*1350/1000=$33,750
No 1 common market price=75,000*750/1000=$56,250
No 2 common market price=100,000*300/1000=$30,000
Total market price $120,000
The joint cost allocated to No.2 common =market price of no.2 common /total market value*joint cost
the joint cost allocated to no.2=$30,000/$120,000*$70,000=$17,500
