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Newfoundland Lumber has a raw lumber division and a finished lumber division. The variable costs are as follows: Raw lumber division: $90 per 100 board-feet
Newfoundland Lumber has a raw lumber division and a finished lumber division. The variable costs are as follows: Raw lumber division: $90 per 100 board-feet of raw lumber Finished lumber division: $120 per 100 board-feet of finished lumber Assume that there is no board-feet loss in processing raw lumber into finished lumber. Raw lumber can be sold at $190 per 100 board-feet. Finished lumber can be sold at $345 per 100 board-feet. Read the requirements. calculations. Requirements ula. (Use parentheses or a minus sign when entering losses.) her processing 1. 2. Should Newfoundland Lumber process raw lumber into its finished form? Show your calculations. Assume that internal transfers are made at 110% of variable cost. Will each division maximize its division operating-income contribution by adopting the action that is in the best interest of Newfoundland Lumber as a whole? Explain. Assume that internal transfers are made at market prices. Will each division maximize its division operating-income contribution by adopting the action that is in the best interest of Newfoundland Lumber as a whole? Explain. 3. Print Done
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