Calgary Lumber Company incurs a cost of $370 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $542 per hbf. An alternative is to produce a “finished-cut” at a total processing cost of $526 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 Analysis Sell Rough-Cut (Alt. 1) or Process Further into Finished-Cut (Alt. 2) March 15 SellRough-Cut(Alternative 1) Process Furtherinto Finished-Cut(Alternative 2) DifferentialEffects(Alternative 2) Revenues, per 100 board ft. $ $ $ Costs, per 100 board ft. Profit (Loss), per 100 board ft. $ $ $ b. Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).
Calgary Lumber Company incurs a cost of $370 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $542 per hbf. An alternative is to produce a “finished-cut” at a total processing cost of $526 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 Analysis Sell Rough-Cut (Alt. 1) or Process Further into Finished-Cut (Alt. 2) March 15 SellRough-Cut(Alternative 1) Process Furtherinto Finished-Cut(Alternative 2) DifferentialEffects(Alternative 2) Revenues, per 100 board ft. $ $ $ Costs, per 100 board ft. Profit (Loss), per 100 board ft. $ $ $ 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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Calgary Lumber Company incurs a cost of $370 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $542 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).
Differential Analysis | |||
Sell 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. | $ | $ | $ |
Costs, per 100 board ft. | |||
$ | $ | $ |
b. Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).
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