Answer Happy

Exercise 11-53 (Algo) Physical Quantities Method with By-Product (LO 11-8, 10) Trans-Pacific Lumber runs a mill in the Northwest that produces two grades of lumber, A and B, and a by-product, sawdust. The company chooses to allocate the costs on the basis of the physical quantities method. Last month, it processed 123,000 logs at a total cost of $348,000. The output of the process consisted of 33,800 units of grade A, 50,800 units of grade B, and 14,800 units of sawdust. The sawdust can be sold for $18,060. This is considered to be its net realizable value, which is deducted from the processing costs of the main products. Required: What share of the joint costs should be assigned to grade A and grade B? (Do not round intermediate calculations.) Product Joint costs Grade A Grade B