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Produce a finished cut at a total processing cost

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Sell or process further

Portland Lumber Company incurs a cost of $452 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $611 per hbf. An alternative is to produce a "finished cut" at a total processing cost of $559 per hbf, which can be sold for $748 per hbf. 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).

Reference no: EM131135402

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