Sell or Process Further

St. Paul Lumber Company incurs a cost of $318 per hundred board feet in processing certain rough-cut lumber, which it sells for $363 per hundred board feet. An alternative is to produce a finished cut at a total processing cost of $497 per hundred board feet, which can be sold for $606 per hundred board feet.

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

a. What is the amount of the differential revenue? $____ 2 per hundred board feet

b. What is the amount of the differential cost? $____ 3 per hundred board feet

c. What is the amount of the differential income for processing rough-cut lumber into finished cut? $____ 4 per hundred board feet