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Part l: Problem E (sell as is or process further) Sierra Lumber Company produces lumber. The company has two grades of lumber at the split-off

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Part l: Problem E (sell as is or process further) Sierra Lumber Company produces lumber. The company has two grades of lumber at the split-off point, A and B. Grade A sells for $4 per board foot and Grade B sells for $2 per board foot. This lumber is suitable for framing and most exterior work but not for the interior of buildings. Either grade can be further processed to make it suitable for interior work at a cost of $1.20 per board foot. After this further processing, the firm can sell Grade A lumber for $5.50 per board foot and Grade B for $3.00 per board foot. Would you recommend the company sell the lumber at the split-off point or process it further to make it suitable for interior work? Explain and give supporting computations Problem F (make or buy) Skate-Right Company, a skateboard manufacturer, is currently operating at 60% capacity and producing about 8,000 units a year. To use more capacity, the manager has been considering the research and development department's suggestion that the company manufacture its own wheels. Currently the company purchases wheels from a supplier at a unit price of $20. (Each unit is a set of wheels for a skateboard.) Estimates show the company can manufacture its own wheels at $10 for direct materials costs and S4 for direct labor cost per unit. The variable factory overhead isS1 per unit. The company's accountants would probably allocate another $6 per unit to the wheels. a. Should Skate-Right make or buy the wheels? b. Suppose Skate-Right could rent out the factory space needed to make the wheels for $5,000 a month. How would this affect your decision in (a), if at all

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