Question: Bitterroot Lumber Company incurs a cost of 275 per hundred

Bitterroot Lumber Company incurs a cost of $275 per hundred board feet in processing certain “rough-cut” lumber, which it sells for $400 per hundred board feet. An alternative is to produce a “finished cut” at a total processing cost of $360 per hundred board feet, which can be sold for $520 per hundred board feet. What is the amount of?
(a) The differential revenue,
(b) Differential cost,
(c) Differential income for processing rough-cut lumber into finished cut?


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  • CreatedMarch 11, 2014
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