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 $566 per hbf. An alternative is to produce a "finished-cut" at a total processing cost of $520 per hbf, which can be sold for $766 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) April 21 Line Item Description Revenues, per 100 board ft. Costs, per 100 board ft. Profit (Loss), per 100 board ft. Sell Rough-Cut (Alternative 1) Process Further into Finished-Cut (Alternative 2) Differential Effects (Alternative 2) b. Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).

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 $566 per hbf. An alternative is to produce a "finished-cut" at a total processing cost of $520 per hbf, which can be sold for $766 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) April 21 Line Item Description Revenues, per 100 board ft. Costs, per 100 board ft. Profit (Loss), per 100 board ft. Sell Rough-Cut (Alternative 1) Process Further into Finished-Cut (Alternative 2) Differential Effects (Alternative 2) b. Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).

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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