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Sell or Process Further Calgary Lumber Company incurs a cost of $384 per hundred board feet (hbf) in processing certain rough-cut lumber, which it sells
Sell or Process Further Calgary Lumber Company incurs a cost of $384 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $566 per hbf. An alternative is to produce a "finished cut" at a total processing cost of $523 per hbf, which can be sold for $746 per hbf. a. Prepare a differential analysis dated March 15, on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2). Differential Analysis Sell Rough-Cut (Alt. 1) or Process Further into Finished-Cut (Alt. 2) March 15 Process Further Differential Sell-Rough-Cut (Alternative 1) into Finished-Cut Effect on Income (Alternative 2) (Alternative 2) Revenues, per unit Costs, per unit Income (Loss), per unit b. Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2)
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