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You operate a lumber mill. You currently take freshly cut trees and process them into 2x4, plywood, and other related products. Given your skilled workforce,
You operate a lumber mill. You currently take freshly cut trees and process them into 2x4, plywood, and other related products. Given your skilled workforce, you are deciding whether or not you'd like to expand operations to include the production of wooden picnic tables.
Sales Price from processed lumber $400 |
Sales Price for Picnic Table $550 |
Cost to Purchase Raw Trees $125 |
Cost to convert trees into processed lumber $200 |
Costs to Convert Processed Lumber to Picnic Table $75 |
Extra Selling Costs for Picnic Table $50 |
Determine whether you should continue to sell processed lumber or expand into wooden picnic tables.
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