Sonimad Sawmill manufactures two lumber products from a joint milling process. The two products developed...
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Sonimad Sawmill manufactures two lumber products from a joint milling process. The two products developed are mine support braces (MSB) and unseasoned commercial building lumber (CBL). A standard production run incurs joint costs of $300,000 and results in 60,000 units of MSB and 90,000 units of CBL. Each MSB sells for $2 per unit, and each CBL sells for $4 per unit. Assume the commercial building lumber is not marketable at split-off but must be further planed and sized at a cost of $200,000 per production run. During this process, 10,000 units are unavoidably lost; these spoiled units have no discernible value. The remaining units of commercial building lumber are salable at $10.00 per unit. The mine support braces, although salable immediately at the split-off point, are coated with a tar-like preservative that costs $100,000 per production run. The braces are then sold for $5 each. If Sonimad Sawmill chose not to process the mine support braces beyond the split-off point, the mine support braces' contribution margin from the joint milling process would be A. $100,000 higher. B. $80,000 lower. C. $150,000 higher. D. $50,000 higher.
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