Strahan Timber has a raw timber division and a finished timber division. The variable costs are as follows:

$$ Raw timber division: $$125$ per $100$ board$-$metres of raw timber

$$ Finished timber division: $$145$ per $100$ board$-$metres of finished timber

Assume that there is no board$-$metre loss in processing raw timber into finished timber. Raw timber can be sold at $$175$ per board$-$metres. Finished timber can be sold at $$345$ per $100$ board$-$metres.

Required

$1.$ Should Strahan Timber process raw timber into its finished form? Show your calculations.

$2.$ Assume that internal transfers are made at $130\%$ of variable cost. Will each division maximise its division operating$-$profit contribution by adopting the action that is in the best interest of Strahan Timber as a whole? Explain.

$3.$ Assume that internal transfers are made at market prices. Will each division maximise its division operating$-$profit contribution by adopting the action that is in the best interest of Strahan Timber as a whole? Explain.