Calgary Lumber Company incurs a cost of $388 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $550 per hbf. An alternative is to produce a “finished cut” at a total processing cost of $520 per hbf, which can be sold for $748 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 Sell Rough-Cut (Alternative 1) Process Further into Finished-Cut (Alternative 2) Differential Effect on Income (Alternative 2) Revenues, per unit $fill in the blank f0f0a4fd6062f85_1 $fill in the blank f0f0a4fd6062f85_2 $fill in the blank f0f0a4fd6062f85_3 Costs, per unit fill in the blank f0f0a4fd6062f85_4 fill in the blank f0f0a4fd6062f85_5 fill in the blank f0f0a4fd6062f85_6 Income (Loss), per unit $fill in the blank f0f0a4fd6062f85_7 $fill in the blank f0f0a4fd6062f85_8 $fill in the blank f0f0a4fd6062f85_9 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 $388 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $550 per hbf. An alternative is to produce a “finished cut” at a total processing cost of $520 per hbf, which can be sold for $748 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 Sell Rough-Cut (Alternative 1) Process Further into Finished-Cut (Alternative 2) Differential Effect on Income (Alternative 2) Revenues, per unit $fill in the blank f0f0a4fd6062f85_1 $fill in the blank f0f0a4fd6062f85_2 $fill in the blank f0f0a4fd6062f85_3 Costs, per unit fill in the blank f0f0a4fd6062f85_4 fill in the blank f0f0a4fd6062f85_5 fill in the blank f0f0a4fd6062f85_6 Income (Loss), per unit $fill in the blank f0f0a4fd6062f85_7 $fill in the blank f0f0a4fd6062f85_8 $fill in the blank f0f0a4fd6062f85_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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Sell or Process Further
Calgary Lumber Company incurs a cost of $388 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $550 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 Effect on Income (Alternative 2) |
|
Revenues, per unit | $fill in the blank f0f0a4fd6062f85_1 | $fill in the blank f0f0a4fd6062f85_2 | $fill in the blank f0f0a4fd6062f85_3 |
Costs, per unit | fill in the blank f0f0a4fd6062f85_4 | fill in the blank f0f0a4fd6062f85_5 | fill in the blank f0f0a4fd6062f85_6 |
Income (Loss), per unit | $fill in the blank f0f0a4fd6062f85_7 | $fill in the blank f0f0a4fd6062f85_8 | $fill in the blank f0f0a4fd6062f85_9 |
b. Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).
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