Question
A lumber company produces several products that can be sold at the split-off point or processed further and then sold. The following results are from
A lumber company produces several products that can be sold at the split-off point or processed further and then sold. The following results are from a recent period:
| Sales Value | Additional | Sales Value after | |||||
| Product | at Split-off | Variable Costs | Further Processing | ||||
| | | | | ||||
| Green lumber | $159,600 | $24,000 | $178,000 | ||||
| Rough lumber | 124,000 | 28,200 | 173,600 | ||||
| Sawdust | 102,000 | 19,600 | 130,000 |
Which products should be processed further?
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A.Green lumber and sawdust only.
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B.All three products.
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C.Rough lumber and sawdust only.
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D.Green lumber and rough lumber only.
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Managerial Economics Theory Applications and Cases
Authors: Bruce Allen, Keith Weigelt, Neil A. Doherty, Edwin Mansfield
8th edition
978-0393124491, 393124495, 978-0039391277, 393912779, 978-0393912777
