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Sell or Process Further i Timberland Lumber Company incurs a cost of $384 per hundred board feet (hbf) in processing certain rough-out lumber, which
Sell or Process Further i Timberland Lumber Company incurs a cost of $384 per hundred board feet (hbf) in processing certain "rough-out" lumber, which it sells for $564 per hbf. An alternative is to produce a "finished cut" at a total processing cost of $526 per hbf, which can be sold for $764 per hbf. Prepare a differential analysis dated August 9 on whether to Sell Rough Cut (Alternative 1) or Process Further into finished Cut (Alternative 2). For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Sell Rough Cut (Alt. 1) or Process Further into Finished Cut (Alt. 2) August 9 Sell Rough Cut (Alternative 1) Process Further into Finished Cut (Alternative 2) Differential Effects (Alternative 2) Revenues, per 100 board ft. Costs, per 100 board ft. Profit (loss), per 100 board ft. Check My Work For both products, subtract the costs from the revenues per 100 board feet. Determine the differential effect on income of the revenues, costs, and income (loss) by subtracting alternative 2 from alternative 1.
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