Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Chapter 11, Problem 11E
Sell or process further
Calgary Lumber Company incurs a cost of $315 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $440 per hbf. An alternative is to produce a “finished cut” at a total
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Sell or Process Further
Calgary Lumber Company incurs a cost of $384 per
hundred board feet (hbf) in processing certain "rough-
cut" lumber, which it sells for $542 per hbf. An
alternative is to produce a "finished-cut" at a total
processing cost of $524 per hbf, which can be sold for
$744 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)
Revenues, per 100 board ft.
Costs, per 100 board ft.
Profit (Loss), per 100 board ft.
March 15
Sell
Process Further
Rough-Cut into Finished-Cut
(Alternative 1)
(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
Calgary Lumber Company incurs a cost of $392 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $550 per hbf. An alternative is to produce a "finished-cut" at a total processing cost of $522 per hbf, which can
be sold for $764 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
into Finished-Cut
Rough-Cut
(Alternative 1)
Effects
(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).
Sell or Process Further
Calgary Lumber Company incurs a cost of $382 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $548 per hbf. An alternative is to produce a “finished-cut” at a total processing cost of $525 per hbf, which can be sold for $772 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 Rough-Cut(Alternative 1)
Process Further into Finished-Cut(Alternative 2)
Differential Effects(Alternative 2)
Revenues, per 100 board ft.
$fill in the blank
$fill in the blank
$fill in the blank
Costs, per 100 board ft.
fill in the blank
fill in the blank
fill in the blank
Profit (Loss), per 100 board ft.
$fill in the blank
$fill in the blank
$fill in the blank
b. Determine whether…
Chapter 11 Solutions
Managerial Accounting
Ch. 11 - Explain the meaning of (A) differential revenue,...Ch. 11 - A company could sell a building for 250,000 or...Ch. 11 - A chemical company has a commodity-grade and...Ch. 11 - A company accepts incremental business at a...Ch. 11 - Prob. 5DQCh. 11 - Prob. 6DQCh. 11 - Prob. 7DQCh. 11 - Although the cost-plus approach to product pricing...Ch. 11 - How does the target cost method differ from...Ch. 11 - Prob. 10DQ
Ch. 11 - Lease or sell Plymouth Company owns equipment with...Ch. 11 - Prob. 2BECh. 11 - Make or buy A company manufactures various-sized...Ch. 11 - Replace equipment A machine with a book value of...Ch. 11 - Prob. 5BECh. 11 - Prob. 6BECh. 11 - Prob. 7BECh. 11 - Prob. 8BECh. 11 - Differential analysis for a lease or sell decision...Ch. 11 - Prob. 2ECh. 11 - Differential analysis for a discontinued product A...Ch. 11 - Differential analysis for a discontinued product...Ch. 11 - Prob. 5ECh. 11 - Prob. 6ECh. 11 - Make-or-buy decision Somerset Computer Company has...Ch. 11 - Prob. 8ECh. 11 - Machine replacement decision A company is...Ch. 11 - Differential analysis for machine replacement...Ch. 11 - Sell or process further Calgary Lumber Company...Ch. 11 - Sell or process further Dakota Coffee Company...Ch. 11 - Prob. 13ECh. 11 - Accepting business at a special price Box Elder...Ch. 11 - Prob. 15ECh. 11 - Prob. 16ECh. 11 - Product cost method of product costing Smart...Ch. 11 - Target costing Toyota Motor Corporation (TM) uses...Ch. 11 - Prob. 19ECh. 11 - Prob. 20ECh. 11 - Prob. 21ECh. 11 - Total cost method of product pricing Based on the...Ch. 11 - Variable cost method of product pricing Based on...Ch. 11 - Differential analysis involving opportunity costs...Ch. 11 - Differential analysis for machine replacement...Ch. 11 - Differential analysis for sales promotion proposal...Ch. 11 - Prob. 4PACh. 11 - Product pricing and profit analysis with...Ch. 11 - Product pricing using the cost-plus approach...Ch. 11 - Prob. 1PBCh. 11 - Differential analysis for machine replacement...Ch. 11 - Prob. 3PBCh. 11 - Prob. 4PBCh. 11 - Prob. 5PBCh. 11 - Prob. 6PBCh. 11 - Analyze Pacific Airways Pacific Airways provides...Ch. 11 - Service yield pricing and differential equations...Ch. 11 - Prob. 3MADCh. 11 - Prob. 4MADCh. 11 - Aaron McKinney is a cost accountant for Majik...Ch. 11 - Prob. 3TIFCh. 11 - Decision on accepting additional business A...Ch. 11 - Accepting service business at a special price If...Ch. 11 - Identifying product cost distortion Peachtree...Ch. 11 - Prob. 1CMACh. 11 - Prob. 2CMACh. 11 - Aril Industries is a multiproduct company that...Ch. 11 - Oakes Inc. manufactured 40,000 gallons of Mononate...
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