Proble m 4 (Textbook Re fe rence: P6-5)- Decide whether to process furthe r or sell jpint products Sierra Lumber Company produces kumber. The company has two grades of lumber at the split-off point, A and B.Grade A sells for $4 per board foot and Grade B sells for S2 per board foot. This kumber is suitable for framing and most exteris work but no for the interior of buildings. Either grade can be further processed to make t of S1.20 per board foot. After this further processing, the firm can sell Grade A lumber for $5.50 B for $3.00 per board foot. suitable for interior work at a cos Required Would you recommend the company sell the work? Explain and give supporting computations. lumber at the splt-off point or process it further to make i suitable for interior Hint: Utilize the table below to help you reach a conclusion SIERRA LUMBER COMPANY Grade A Grade B Differential Revenue of Further Processing One Board Foot of Lumber Differential Costs of Further Processing One Board Foot of Lumber Net Advantage (disadvantage) of Further Processing Sierra Lumber should process Grade A further since the additional revenuegenerated afer processing is greater than the additional costs. Grade B should not be processed further because the additional costs are greater than the additional revenues