Carson Wood Products Processes Logs into Four Grades of Lumber

Multiple Choice

Carson Wood Products processes logs into four grades of lumber totaling 500,000 board feet as follows at a joint cost of $300,000: $$\begin{array} { l c c } \text { Grade } & \text { Board Feet } & \text { Final Sales Value } \\\text { First and second } & 75,000 & \$ 56,250 \\\text { No. } 1 \text { common } & 200,000 & 180,000 \\\text { No. } 2 \text { common } & 100,000 & 105,000 \\\text { No. } 3 \text { common } & 125,000 & 127,500\end{array}$$ What amount of joint costs will be allocated to No. 2 common using the constant gross margin percentage method?

A) $300,000
B) $67,200
C) $37,800
D) $192,000