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Sell or Process Further Calgary Lumber Company incurs a cost of $380 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 $380 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $568 per hbf. An alternative is t produce a "finished-cut" at a total processing cost of $521 per hbf, which can be sold for $780 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) Feedback Check My Work For both products, subtract the costs from the revenues, per 100 board ft. Determine the differential effect on income of the revenues, costs, and profit (loss) by subtracting alternative 1 from alternative 2. b. Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2)
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