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Sunday, September 27, 2015

Bunyon Lumber Company incurs a cost of $490 per hundred board feet in processing certain "rough-cut" lumber

EX 9-10 Bunyon Lumber Company incurs a cost of $490 per hundred board feet in processing certain "rough-cut" lumber, which it sells for $635 per hundred board feet. An alternative is to produce a "finished cut" at a total processing cost of $565 per hundred board feet, which can be sold for $840 per hundred board feet.

What is the amount of (a) the differential revenue, (b) differential cost, and (c) differential income for processing rough-cut lumber into finished cut?

Click here for the solution: Bunyon Lumber Company incurs a cost of $490 per hundred board feet in processing certain "rough-cut" lumber