Question
Sell or Process Further Calgary Lumber Company incurs a cost of $396 per hundred board feet (hbf) in processing certain rough-cut lumber, which it
Sell or Process Further Calgary Lumber Company incurs a cost of $396 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $554 per hbf. An alternative is to produce a "finished cut" at a total processing cost of $527 per hbf, which can be sold for $774 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) Revenues, per unit Costs, per unit Income (Loss), per unit Feedback March 15 Process Further (Alternative 2) Differential Sell-Rough-Cut (Alternative 1) into Finished-Cut Effect on Income (Alternative 2) Check My Work For both products, subtract the costs from the revenues, per unit. Determine the differential effect on income of the revenues, costs, and income (loss) by subtracting alternative 2 from alternative 1. Learning Objective 1
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