algary Lumber Company incurs a cost of $392 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $568 per hbf. An alternative is to produce a “finished-cut” at a total processing cost of $528 per hbf, which can be sold for $754 per hbf.a. Prepare a differential analysis dated March 15 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).Differential AnalysisSell Rough-Cut (Alt. 1) or Process Further into Finished-Cut (Alt. 2)March 15 SellRough-Cut(Alternative 1)Process Furtherinto Finished-Cut(Alternative 2)DifferentialEffects(Alternative 2)Revenues, per 100 board ft.$fill in the blank b7d85405bf94077_1$fill in the blank b7d85405bf94077_2$fill in the blank b7d85405bf94077_3Costs, per 100 board ft.fill in the blank b7d85405bf94077_4fill in the blank b7d85405bf94077_5fill in the blank b7d85405bf94077_6Profit (Loss), per 100 board ft.$fill in the blank b7d85405bf94077_7$fill in the blank b7d85405bf94077_8$fill in the blank b7d85405bf94077_9 b. Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).

The differential analysis is performed to compare the different alternatives available with respect…

Answered: algary Lumber Company incurs a cost of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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algary Lumber Company incurs a cost of $392 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $568 per hbf. An alternative is to produce a “finished-cut” at a total processing cost of $528 per hbf, which can be sold for $754 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 AnalysisSell Rough-Cut (Alt. 1) or Process Further into Finished-Cut (Alt. 2)March 15

	Sell Rough-Cut (Alternative 1)	Process Further into Finished-Cut (Alternative 2)	Differential Effects (Alternative 2)
Revenues, per 100 board ft.	$fill in the blank b7d85405bf94077_1	$fill in the blank b7d85405bf94077_2	$fill in the blank b7d85405bf94077_3
Costs, per 100 board ft.	fill in the blank b7d85405bf94077_4	fill in the blank b7d85405bf94077_5	fill in the blank b7d85405bf94077_6
Profit (Loss), per 100 board ft.	$fill in the blank b7d85405bf94077_7	$fill in the blank b7d85405bf94077_8	$fill in the blank b7d85405bf94077_9

b. Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).

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