Sell or Process Further

Northern Lumber Company incurs a cost of $$250$ per hundred board feet $($hbf$)$ in processing certain "rough$-$cut" lumber, which it sells for $$300$ per hbf$.$ An alternative is to produce a "finished$-$cut" at a total processing cost of $$315$ per hbf$,$ which can be sold for $$375$ 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$.2)$

April $21$

$\backslash$table$[[\backslash$table$[[$Line Item Description$]],\backslash$table$[[$Sell Rough$-$Cut$],[($Alternative $1)]],\backslash$table$[[$Process Further$],[$into Finished$-$Cut$],[($Alternative $2)]],\backslash$table$[[$Differential Effects$],[($Alternative $2)]]],[\backslash$table$[[$Revenues$,$ per $100$ board ft$.],[$Costs$,$ per $100$ board ft$.]],$$$,$$$,$