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Bunyon Lumber Company incurs a cost of $394 per hundred board feet (hbf) in processing certain rough-cut lumber, which it sells for $562 per
Bunyon Lumber Company incurs a cost of $394 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $562 per hbf. An alternative is to produce a "finished cut" at a total processing cost of $525 per hbf, which can be sold for $776 per hbf. Prepare a differential analysis dated August 9 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2). For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Sell Rough-Cut (Alt. 1) or Process Further into Finished Cut (Alt. 2) August 9 Sell Rough-Cut (Alternative 1) Process Further into Differential Effect on Income Finished Cut (Alternative 2) (Alternative 2) Revenues, per 100 board ft. Costs, per 100 board ft. Income (Loss), per 100 board ft. Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).
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