Question: Please answer this Sell or Process Further Northern Lumber Company incurs a cost of $394 per hundred board feet (hbf) in processing certain rough-cut lumber,
Sell or Process Further Northern Lumber Company incurs a cost of $394 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 $521 per hbf, which car be sold for $758 per hbf. a. Prepare a differential analysis dated April 21 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) April 21 Process Further Sell Rough-Cut Differential Effects Line Item Description Revenues, per 100 board ft. Costs, per 100 board ft. Profit (Loss), per 100 board ft. into Finished-Cut (Alternative 1) (Alternative 2) (Alternative 2) b. Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).
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