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Northern Lumber Company incurs a cost of $386 per hundred board feet (hbf) in processing certain rough-cut lumber, which it sells for $570 per hbf.
Northern Lumber Company incurs a cost of $386 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $570 per hbf. An alternative is to produce a "finished-cut" at a total processing cost of $527 per hbf, which can be sold for $740 per hbf. a. Prepare a differential analysis dated April 21 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2). Differential Analysis Sell Rouah-Cut (Alt. 1) or Process Further into Finished-Cut (Alt. 2) b. Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2)
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