Timberland Lumber Company incurs a cost of $398 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $532 per hbf. An alternative is to produce a “finished cut” at a total processing cost of $515 per hbf, which can be sold for $656 per hbf. Prepare a differential analysis dated August 9 on whether to Sell Rough Cut (Alternative 1) or Process Further into Finished Cut (Alternative 2). For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Sell Rough Cut (Alt. 1) or Process Further into Finished Cut (Alt. 2) August 9 Sell Rough Cut (Alternative 1) Process Further Into Finished Cut (Alternative 2) Differential Effects (Alternative 2) Revenues, per 100 board ft. $ $ $ Costs, per 100 board ft. Profit (loss), per 100 board ft. $ $ $ Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).
Timberland Lumber Company incurs a cost of $398 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $532 per hbf. An alternative is to produce a “finished cut” at a total processing cost of $515 per hbf, which can be sold for $656 per hbf. Prepare a differential analysis dated August 9 on whether to Sell Rough Cut (Alternative 1) or Process Further into Finished Cut (Alternative 2). For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Sell Rough Cut (Alt. 1) or Process Further into Finished Cut (Alt. 2) August 9 Sell Rough Cut (Alternative 1) Process Further Into Finished Cut (Alternative 2) Differential Effects (Alternative 2) Revenues, per 100 board ft. $ $ $ Costs, per 100 board ft. Profit (loss), per 100 board ft. $ $ $ Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sell or Process Further
Timberland Lumber Company incurs a cost of $398 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $532 per hbf. An alternative is to produce a “finished cut” at a total
Prepare a differential analysis dated August 9 on whether to Sell Rough Cut (Alternative 1) or Process Further into Finished Cut (Alternative 2). For those boxes in which you must enter subtracted or negative numbers use a minus sign.
| Differential Analysis |
| Sell Rough Cut (Alt. 1) or Process Further into Finished Cut (Alt. 2) |
| August 9 |
|
Sell Rough Cut (Alternative 1) |
Process Further Into Finished Cut (Alternative 2) |
Differential Effects (Alternative 2) | |
| Revenues, per 100 board ft. | $ | $ | $ |
| Costs, per 100 board ft. | |||
| $ | $ | $ |
Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).
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