Problem:
Oregon Lumber processes timber into four products. During January, the joint costs of processing were $280,000. There was no inventory at the beginning of the month. Production and sales value information for the month is as follows:
Sales Value at
Product
Board feet
Splitoff Point
Ending Inventory
2 x 4's
6,000,000
$0.30 per board foot
500,000 bdft.
2 x 6's
3,000,000
0.40 per board foot
250,000 bdft.
4 x 4's
2,000,000
0.45 per board foot
100,000 bdft.
Slabs
1,000,000
0.10 per board foot
50,000 bdft.
Question: Determine the value of ending inventory if the sales value at splitoff method is used for product costing. Round to 3 decimal places when necessary.