Question: Bramble Sawmill Co. runs rough logs through its cutting facility for the primary purpose of producing hardwood lumber. In this process, however, not all of


Bramble Sawmill Co. runs rough logs through its cutting facility for the primary purpose of producing hardwood lumber. In this process, however, not all of the wood is of high enough quality to be sold as hardwood lumber. The other joint product, lower-grade lumber, has been sold as-is to other manufacturers to make wood pallets. Last year, the following quantities and sales prices were reported. Paul, the sawmill owner, is meeting with other top managers as they consider avenues for increased profitability. They recognize that selling the lower-grade wood to other companies has certainly helped the mill's bottom line. However, they wonder if they could further process this wood themselves and make even more of a return. If the outlook for low-grade lumber sales to manufacturers changes such that Bramble Sawmill will only be able to sell these low-grade products for $1.75 per board foot at the split-off point, does that change your answer to the wood chip option in part (b)? The company process the low-grade lumber further into wood chips. It would be financially by $ if it did process it further. Bramble Sawmill Co. runs rough logs through its cutting facility for the primary purpose of producing hardwood lumber. In this process, however, not all of the wood is of high enough quality to be sold as hardwood lumber. The other joint product, lower-grade lumber, has been sold as-is to other manufacturers to make wood pallets. Last year, the following quantities and sales prices were reported. Paul, the sawmill owner, is meeting with other top managers as they consider avenues for increased profitability. They recognize that selling the lower-grade wood to other companies has certainly helped the mill's bottom line. However, they wonder if they could further process this wood themselves and make even more of a return. If the outlook for low-grade lumber sales to manufacturers changes such that Bramble Sawmill will only be able to sell these low-grade products for $1.75 per board foot at the split-off point, does that change your answer to the wood chip option in part (b)? The company process the low-grade lumber further into wood chips. It would be financially by $ if it did process it further
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
