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Physical Units Method, Relative Sales-Value-at-Split-off Method, Net Realizable Value Method, Decision Making Sonimad Sawmin, inc. (551); purchases logs from independent timber contractors and processes them into the following three types of lumber products: 1. Studs for residential construction (e.9. walls and ceilings) 2. Decorative pieces (e.9. fireplace mantels and beams for cathedral ceilings) 3. Posts used as support braces (e.9., mine support braces and braces for exterior fences around ranch properties) These products are the result of a joint sawmill process that involves removing bark from the logs, cutting the logs into a workable size (ranging from 8 to 16 feet in length), a then cutting the individual products from the logs, depending upon the type of wood (pine, oak, walnut, or maple) and the site (diameter) of the log. The joint process results in the following costs and output of products during a typical month: The studs are sold as rough-cut lumber after emerging from the smwmill operation without further processing by 551 . Also, the posts require no further processing. The decorative pieces must be planed and further sized after emerging from the 551 sasmill. This additional processing cests 55t$100,000 por month and normaly results in a loss of 10 percen of the units entering the process. Without this planing and sizing process, there is still an active intermediate market for the unfinished decorative pleces where the sales price averages $60 per unit. Required: 1. Bosed on the information given for Sonimad 5awmill, Ine, allocate the joint processing costs of $1,010,000 to each of the three broduct lines using thei a. Relative sales-value-at-splt-off method. When required, round decimal values to four placos before converting to a percentage. For erample, - es349 would be rounded to . 8s35 and emered as "85.35" percent. b. Physical units method at split-off. c. Estimated net realizable value method. When required, round decimal values to four places before converting to a percentage. For example, . Ba349 would be rounded to - b835 and entered as "B8.35" percent. 2. Prepare an analysis for Sonimad Sawmill, inc, to compare processing the decorative pieces further as it presently does, with seling the rough-cut product immediately at sple: off. Sonimad Sawmill, Inc. Analysis Report Monthly unit output Final sales value Differentisi revenue Additional contribution from further processing

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