Vancouver Lumber has a raw lumber division and a finished lumber division. The variable costs are as follows:

Raw lumber division: $120 per 100 board-feet of raw lumber

Finished lumber division: $145 per 100 board-feet of finished lumber

Assume that there is no board-feet loss in processing raw lumber into finished lumber. Raw lumber can be sold at $170 per 100 board-feet. Finished lumber can be sold at $370 per 100 board-feet.

Requirements:

1.	Should Vancouver Lumber process raw lumber into its finished form? Show your calculations. Begin by selecting the formula you will use to make your decision. Then enter the amounts in the formula.
2.	Assume that internal transfers are made at 130% of variable cost. Will each division maximize its division operating-income contribution by adopting the action that is in the best interest of Vancouver Lumber as a whole? Explain.
3.	Assume that internal transfers are made at market prices. Will each division maximize its division operating-income contribution by adopting the action that is in the best interest of Vancouver Lumber as a whole? Explain.