Question

Portland Lumber Company incurs a cost of $465 per hundred board feet (hbf) in processing certain...


Portland Lumber Company incurs a cost of $465 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $630 per hbf. An alternative is to produce a “finished cut” at a total processing cost of $566 per hbf, which can be sold for $766 per hbf.

Required:
1. Prepare a differential analysis dated June 14 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2). Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter “0”. A colon (:) will automatically appear if required.
2.

Determine whether the company should sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).


1. Prepare a differential analysis dated June 14 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2). Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter “0”. A colon (:) will automatically appear if required.

Differential Analysis

Sell Rough Cut (Alternative 1) or Process Further into Finished Cut (Alternative 2)

June 14

1

Sell Rough Cut

Process Further into Finished Cut

Differential Effect on Income

2

(Alternative 1)

(Alternative 2)

(Alternative 2)

3

4

5

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

The company is indifferent since the result is the same regardless of which alternative is chosen.

Sell rough-cut lumber

Process further and sell finished-cut lumber

Amount Descriptions
Costs, per 100 board ft.
Income (Loss), per 100 board ft.
Revenues, per 100 board ft.

Homework Answers

Answer #1
1
Differential Analysis
Sell Rough Cut (Alternative 1) or Process Further into Finished Cut (Alternative 2)
June 14
Sell Rough Cut Process Further into Finished Cut Differential Effect on Income
(Alternative 1) (Alternative 2) (Alternative 2)
Revenues, per 100 board ft. 630 766 136
Costs, per 100 board ft. -465 -566 -101
Income (Loss), per 100 board ft. 165 200 35
2
Process further and sell finished-cut lumber
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Sell or Process Further Jackson Lumber Company incurs a cost of $374 per hundred board feet...
Sell or Process Further Jackson Lumber Company incurs a cost of $374 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $564 per hbf. An alternative is to produce a "finished cut" at a total processing cost of $522 per hbf, which can be sold for $750 per hbf. Prepare a differential analysis dated August 9 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2). For those boxes...
Sell or Process Further Jackson Lumber Company incurs a cost of $374 per hundred board feet...
Sell or Process Further Jackson Lumber Company incurs a cost of $374 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $552 per hbf. An alternative is to produce a "finished cut" at a total processing cost of $530 per hbf, which can be sold for $754 per hbf. Prepare a differential analysis dated August 9 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2). For those boxes...
Sell or Process Further Calgary Lumber Company incurs a cost of $400 per hundred board feet...
Sell or Process Further Calgary Lumber Company incurs a cost of $400 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $570 per hbf. An alternative is to produce a “finished-cut” at a total processing cost of $529 per hbf, which can be sold for $748 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...
Sell or Process Further Calgary Lumber Company incurs a cost of $376 per hundred board feet...
Sell or Process Further Calgary Lumber Company incurs a cost of $376 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $564 per hbf. An alternative is to produce a “finished cut” at a total processing cost of $529 per hbf, which can be sold for $778 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...
Calgary Lumber Company incurs a cost of $45 per hundred board feet in processing certain "rough-cut"...
Calgary Lumber Company incurs a cost of $45 per hundred board feet in processing certain "rough-cut" lumber, which it sells for $51 per hundred board feet. An alternative is to produce a "finished-cut" at a total processing cost of $55 per hundred board feet, which can be sold for $72 per hundred board feet. If Calgary chooses to produce "finished-cut", how much is differential income? Group of answer choices $ 10 per hundred board feet $ 1 per hundred board...
A restaurant bakes its own bread for a cost of $165 per unit (100 loaves), including...
A restaurant bakes its own bread for a cost of $165 per unit (100 loaves), including fixed costs of $41 per unit. A proposal is offered to purchase bread from an outside source for $110 per unit, plus $18 per unit for delivery. Required: 1. Prepare a differential analysis dated August 16 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bread, assuming fixed costs are unaffected by the decision. Refer to the list of...
A company is considering replacing an old piece of machinery, which cost $618,800 and has $344,300...
A company is considering replacing an old piece of machinery, which cost $618,800 and has $344,300 of accumulated depreciation to date, with a new machine that has a purchase price of $539,850. The old machine could be sold for $234,800. The annual variable production costs associated with the old machine are estimated to be $61,850 per year for eight years. The annual variable production costs for the new machine are estimated to be $20,850 per year for eight years. Required:...
The management of Dominican Sugar Company is considering whether to process further raw sugar into refined...
The management of Dominican Sugar Company is considering whether to process further raw sugar into refined sugar. Refined sugar can be sold for $2.23 per pound, and raw sugar can be sold without further processing for $1.38 per pound. Raw sugar is produced in batches of 43,500 pounds by processing 100,000 pounds of sugar cane, which costs $0.33 per pound of cane. Refined sugar will require additional processing costs of $0.48 per pound of raw sugar, and 1.25 pounds of...
Product R is normally sold for $52 per unit. A special price of $42 is offered...
Product R is normally sold for $52 per unit. A special price of $42 is offered for the export market. The variable production cost is $30 per unit. An additional export tariff of 30% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order. Required: 1. Prepare a differential analysis dated October 23 on whether to reject (Alternative 1) or accept (Alternative 2) the special order. Refer to the list of Amount...
Process or Sell Product A is produced for $3.56 per pound. Product A can be sold...
Process or Sell Product A is produced for $3.56 per pound. Product A can be sold without additional processing for $4.22 per pound or processed further into Product B at an additional cost of $0.36 per pound. Product B can be sold for $4.38 per pound. Prepare a differential analysis dated November 15 on whether to sell A (Alternative 1) or process further into B (Alternative 2). If required, round your answers to the nearest whole dollar. For those boxes...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT