=+EX 25-9 Differential analysis report for machine replacement obj. 1

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a. Annual differential increase in costs, $7,200 1166 Chapter 25 Differential Analysis and Product Pricing Bunyon Lumber Company incurs a cost of $490 per hundred board feet in processing certain “rough-cut” lumber, which it sells for $635 per hundred board feet. An alternative is to produce a “finished cut” at a total processing cost of $565 per hundred board feet, which can be sold for $840 per hundred board feet. What is the amount of

(a) the differential revenue,

(b) differential cost, and

(c) differential income for processing rough-cut lumber into finished cut?