
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Sell or Process Further
Bunyon Lumber Company incurs a cost of $398 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $562 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 lumber (Alternative 1) or process further into finished-cut lumber (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 Effect on Income (Alternative 2) |
|
Revenues, per 100 board ft. | $ | $ | $ |
Costs, per 100 board ft. | |||
Income (Loss), 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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