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Sell or Process Further Northern Lumber Company incurs a cost of $386 per hundred board feet (hbf) in processing certain rough-cut lumber, which it sells
Sell or Process Further Northern Lumber Company incurs a cost of $386 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $570 per hbf. An alternative is to produce a "finished-cut" at a total processing cost of $530 per hbf, which can be sold for $772 per hbf. a. Prepare a differential analysis dated April 21 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) Anril 21 Feedback v 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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