Calgary Lumber Company incurs a cost of $392 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 $522 per hbf, which can be sold for $764 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 Process Further Differential Effects (Alternative 2) Rough-Cut into Finished-Cut (Alternative 1) (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 $392 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 $522 per hbf, which can be sold for $764 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 Process Further Differential Effects (Alternative 2) Rough-Cut into Finished-Cut (Alternative 1) (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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