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Washington Lumber has a raw fumber division and a finished lumber division. The variable costs are as follows: - Rew lumber division $140 per 100
Washington Lumber has a raw fumber division and a finished lumber division. The variable costs are as follows: - Rew lumber division $140 per 100 board-feet of raw lumber - Finished lumber division: $165 per 100 board-feet of finished lumber Assume that there is no board-leot loss in processing raw lumber into finished lumber. Raw lumber can be soid at $215 per 100 board-feet. Finished lumber can bo sold at $340 per 100 board-feet. Read the cequiroments Requirement 1, Should Washington Lumber process raw lumbor into its finished form? Show your calculations: Bogin by solecting 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 ) - Gaiv(loss) on furthor procossing Requirements 1. Should Washington Lumber process raw lumber into its finished form? Show your calculations. 2. Assume that internal transfers are made at 150% of variable cost. Will each division maximize its division operating-income contribution by adopting the action that is in the best interest of Washington 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 Washington Lumber as a whole? Explain
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