A Lumber Mill Paid $70,000 for Logs That Produced 200,000

Multiple Choice

A lumber mill paid $70,000 for logs that produced 200,000 board feet of lumber in 3 different grades and amounts as follows: $$\begin{array} { l r r r } { \text { Grade } } & \text { Production } & \text { Market Price } \\\text { Structural } & 25,000 \text { board feet } & \mathbf { \$ } 1,350 / 1,000 \text { bd. ft. } \\\text { No. 1 Common } & 75,000 \text { board feet } & \$ \$ 750 / 1,000 \text { bd. ft. } \\\text { No. 2 Common } & 100,000 \text { board feet } & \mathbf { \$ } 300 / 1,000 \text { bd. ft. }\end{array}$$ Compute the portion of the $70,000 joint cost to be allocated to No. 2 Common if the value basis is used.

A) $35,000.
B) $70,000.
C) $17,500.
D) $23,333.
E) $0.