Sell or Process Further

Jackson Lumber Company incurs a cost of $400 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $540 per hbf. An alternative is to produce a "finished cut" at a total processing cost of $522 per hbf, which can be sold for $770 per hbf.

Question Content Area

Prepare a differential analysis dated August 9 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2). For those boxes in which you must enter subtracted or negative numbers use a minus sign.

	Sell Rough-Cut (Alternative 1)	Process Further into Finished Cut (Alternative 2)	Differential Effect on Income (Alternative 2)
Revenues, per 100 board ft.	$fill in the blank 89cf100beff5f8f_1	$fill in the blank 89cf100beff5f8f_2	$fill in the blank 89cf100beff5f8f_3
Costs, per 100 board ft.	fill in the blank 89cf100beff5f8f_4	fill in the blank 89cf100beff5f8f_5	fill in the blank 89cf100beff5f8f_6
Income (Loss), per 100 board ft.	$fill in the blank 89cf100beff5f8f_7	$fill in the blank 89cf100beff5f8f_8	$fill in the blank 89cf100beff5f8f_9

Question Content Area

Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).