Pacific Northwest Lumber has a raw lumber division and a finished lumber division. The variable costs are:

Raw lumber division: $$110$ per $100$ board$-$feet of raw lumber

Finished lumber division: $$140$ per $100$ board$-$feet of finished lumber

Finished lumber division:

Division revenues

Transferred$-$in costs

Division variable costs

Division operating income $($loss$)$

Finished

Lumber

Division:

Will each division maximize its division operating$-$income contribution by adopting the action that is in the best interest of Pacific Northwest Lumber as a whole? Explain.

The raw lumber division will maximize reported division operating income b$!$

$,$ which

the action preferred by

the company as a whole.

The finished lumber division will maximize division operating income by

$,$ which

the action preferred by the

company as a whole.

Pacific Northwest Lumber as a whole? Explain.

entering losses.$)$