Sell or process further Northern Lumber Company incurs a cost of $386 per hundred board feet...
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Sell or process further Northern Lumber Company incurs a cost of $386 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 $528 per hbf, which can be sold for $764 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) Line Item Description Revenues, per 100 board ft. Costs, per 100 board ft. Profit (Loss), per 100 board ft. April 21 Process Further Differential Effects (Alternative 2) (Alternative 2) Sell Rough-Cut into Finished-Cut (Alternative 1) Sell or process further Northern Lumber Company incurs a cost of $386 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 $528 per hbf, which can be sold for $764 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) Line Item Description Revenues, per 100 board ft. Costs, per 100 board ft. Profit (Loss), per 100 board ft. April 21 Process Further Differential Effects (Alternative 2) (Alternative 2) Sell Rough-Cut into Finished-Cut (Alternative 1)
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