Sell or Process Further

Calgary Lumber Company incurs a cost of $382 per hundred board feet (hbf) in processing certain rough-cut lumber, which it sells for $560 per hbf. An alternative is to produce a finished-cut at a total processing cost of $528 per hbf, which can be sold for $744 per hbf.

Question Content Area

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

	Sell Rough-Cut (Alternative 1)	Process Further into Finished-Cut (Alternative 2)	Differential Effects (Alternative 2)
Revenues, per 100 board ft.	$fill in the blank a1442efecfa1f99_1	$fill in the blank a1442efecfa1f99_2	$fill in the blank a1442efecfa1f99_3
Costs, per 100 board ft.	fill in the blank a1442efecfa1f99_4	fill in the blank a1442efecfa1f99_5	fill in the blank a1442efecfa1f99_6
Profit (Loss), per 100 board ft.	$fill in the blank a1442efecfa1f99_7	$fill in the blank a1442efecfa1f99_8	$fill in the blank a1442efecfa1f99_9