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Sell or Process Further Calgary Lumber Company incurs a cost of $388 per hundred board...

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Accounting

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Sell or Process Further Calgary Lumber Company incurs a cost of $388 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $556 per hbf. An alternative is to produce a "finished-cut" at a total processing cost of $525 per hbf, which can be sold for $750 per hbf. a. Prepare a differential analysis dated March 15 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) March 15 Sell Process Further Differential Rough-Cut into Finished-Cut Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues, per 100 board ft. Costs, per 100 board ft. Profit (Loss), per 100 board ft. b. Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2)

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