algary Lumber Company incurs a cost of $392 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $568 per hbf. An alternative is to produce a “finished-cut” at a total processing cost of $528 per hbf, which can be sold for $754 per hbf. a. Prepare a differential analysis dated March 15 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2). Differential AnalysisSell Rough-Cut (Alt. 1) or Process Further into Finished-Cut (Alt. 2)March 15 Sell Rough-Cut (Alternative 1) Process Further into Finished-Cut (Alternative 2) Differential Effects (Alternative 2) Revenues, per 100 board ft. $fill in the blank b7d85405bf94077_1 $fill in the blank b7d85405bf94077_2 $fill in the blank b7d85405bf94077_3 Costs, per 100 board ft. fill in the blank b7d85405bf94077_4 fill in the blank b7d85405bf94077_5 fill in the blank b7d85405bf94077_6 Profit (Loss), per 100 board ft. $fill in the blank b7d85405bf94077_7 $fill in the blank b7d85405bf94077_8 $fill in the blank b7d85405bf94077_9 b. Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).
algary Lumber Company incurs a cost of $392 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $568 per hbf. An alternative is to produce a “finished-cut” at a total processing cost of $528 per hbf, which can be sold for $754 per hbf. a. Prepare a differential analysis dated March 15 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2). Differential AnalysisSell Rough-Cut (Alt. 1) or Process Further into Finished-Cut (Alt. 2)March 15 Sell Rough-Cut (Alternative 1) Process Further into Finished-Cut (Alternative 2) Differential Effects (Alternative 2) Revenues, per 100 board ft. $fill in the blank b7d85405bf94077_1 $fill in the blank b7d85405bf94077_2 $fill in the blank b7d85405bf94077_3 Costs, per 100 board ft. fill in the blank b7d85405bf94077_4 fill in the blank b7d85405bf94077_5 fill in the blank b7d85405bf94077_6 Profit (Loss), per 100 board ft. $fill in the blank b7d85405bf94077_7 $fill in the blank b7d85405bf94077_8 $fill in the blank b7d85405bf94077_9 b. Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 11E: Sell or process further Calgary Lumber Company incurs a cost of 315 per hundred board feet (hbf) in...
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algary Lumber Company incurs a cost of $392 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $568 per hbf. An alternative is to produce a “finished-cut” at a total
a. Prepare a differential analysis dated March 15 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).
Sell Rough-Cut (Alternative 1) |
Process Further into Finished-Cut (Alternative 2) |
Differential Effects (Alternative 2) |
|
Revenues, per 100 board ft. | $fill in the blank b7d85405bf94077_1 | $fill in the blank b7d85405bf94077_2 | $fill in the blank b7d85405bf94077_3 |
Costs, per 100 board ft. | fill in the blank b7d85405bf94077_4 | fill in the blank b7d85405bf94077_5 | fill in the blank b7d85405bf94077_6 |
$fill in the blank b7d85405bf94077_7 | $fill in the blank b7d85405bf94077_8 | $fill in the blank b7d85405bf94077_9 |
b. Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).
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