Big Fork Lumber Company incurs a cost of $402 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $540 per hbf. An alternative is to produce a "finished cut" at a total processing cost of $523 per hbf, which can be sold for $668 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).
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Ответ:
Answer and Explanation:
The preparation of the differential analysis is presented below:
Particulars Sell Rough cut Process Differential
(Alternative 1) Further into Effect on income
Finished cut (Alternative 2)
(Alternative 2)
Revenues
per 100 board feet $540 $668 $128
Cost per $100
Board ft -$402 -$523 -$121
Income
or loss
per 100 board $138 $145 $7
In the case when the product would get process further so there is an increase in revenue by $7
Ответ:
Thank you!
Explanation:
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