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Vancouver Lumber has a raw lumber division and a finished lumber division. The variable costs are as follows: - Raw lumber division: $120 per 100
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 Read the requirements. Requirement 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. (Use parentheses or a minus sign when entering losses.) Requirements 1. Should Vancouver Lumber process raw lumber into its finished form? Show your calculations. 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
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