The Baker Products Company cuts raw timberoak and pine logsinto 2 x 4 boards.Two steps are required to produce the rough boards from logs.The first step involves stripping bark from the logs.For this step, 2 hours are required to remove the bark from every thousand feet of oak logs, while 3 hours are required for every thousand feet of pine.The second step involves cutting the stripped logs into boards.The cutting process requires 2 hours per thousand feet of oak logs and 1 hour per thousand feet of pine logs.The bark removing machine can operate up to 60 hours a week, but the older cutting machine requires more maintenance and provides only 40 productive hours per week.

Existing agreements with suppliers permit the company to buy up to 18,000 feet of newly harvested oak logs and 16,000 feet of newly harvested pine logs per week. The purchase price is $20 per thousand feet of oak logs and $18 per thousand feet of pine logs. Variable cost is $10 per thousand feet of oak and $6 per thousand feet of pine. The boards from a thousand feet of oak sell for $70, and the boards from a thousand feet of pine sell for $54. Thus, the lumber company's contribution on the processed logs is $40 per thousand feet of oak and $30 per thousand feet of pine.