Question
the nick lumber company is in the process of deciding whether to sell or process further rough sawn lumber. the joint cost of producing the
the nick lumber company is in the process of deciding whether to sell or process further rough sawn lumber. the joint cost of producing the rough sawn lumber is $10,500. the following data is available.
lumber A: number of boards 3,000 , selling price per board (at split off) $16 (after additional procesing) $20, incremental cost to process further $5,000
lumber B: number of boards 2,000 , selling price per board (at split off) $24 (after additional processing) $30, incremental cost to process further $6,500
lumber C: number of boards 1,000 , selling price per board (at split off) $28 (after additional processing) $32, incremental cost to process further $5,500.
A) what Is the incremental effect, increase (or decrease) on operating income of processing each type of lumber further?
B) which type of lumber should be processed further?
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