Sunland Bunyon Lumber Co. produces several products that can be sold at the split-off point or...
Sunland Bunyon Lumber Co. produces several products that can be
sold at the split-off point or processed further and then sold. The
following results are from a recent period:
| Product | Sales Value at Split-off |
Additional Variable Costs |
Sales Value after Further Processing |
|
| Green lumber | $152600 | $23200 | $175800 | |
| Rough lumber | 117000 | 26700 | 163800 | |
| Sawdust | 97000 | 18500 | 123600 |
Which products should be processed further?
All three products.
Rough lumber and sawdust.
Green lumber and rough lumber.
Green lumber and sawdust.
**Hello, I am not sure on how the formula works on this. Thank you!
Homework Answers
this question based on sell or process further .
ROUGH LUMBER:
sale value at split off +additional variable cost= 117000+26700
=143700
sale value after further processing =163800
GREEN LUMBER:
sale value at split off +additional variable cost =152600+23200
=175800
sale value after further procesing is =175800
SAWDUST:
sale value at split off +additional variable cost =97000+18500
=15500
sale value after further processing is =123600
HERE IN THIS PROBLEM WE HAVE TO COMPARE SALE VALUE + ADDITIONAL VARIABLE COST WITH SALE VALUE AFTER FURTHER PROCESSING .AND WE HAVE TO SELECT WHICH IS GIVE MORE PROFIT .
A) ROUGH LUMBER AND SAWDUST;
rough lumber profit =163800-143700
=20100
sawdust profit =123600-115500
=8100
*here rough lumber gives more profit when compared to sawdust .so,process further rough lumber.
B) GREEN LUMBER AND ROUGH LUMBER;
green lumber profit = 175800-175800
=0
rough lumber profit = 163800-143700
=20100
*here rough lumber gives more profit when compared to green lumber.so, process further rough lumber.
C) GREEN LUMBER AND SAWDUST;
green lumber profit =175800-175800
=0
sawdust profit =123600-115500
=8100
* here sawdust give more profit when compared to green lumber .so, process further sawdust.
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Sunland Bunyon Lumber Co. produces several products that can be
sold at the split-off point or...
home work
Product Sales Value at Split-off Additional Variable Costs Sales Value after Further Processing Green lumber $152600 $23200 $175800 Rough lumber 117000 26700 163800 Sawdust 97000 18500 123600
Multiple Choice Question 127 Sheridan Company produces several products that can be sold at the split-off...
Multiple Choice Question 127
Sheridan Company produces several products that can be sold at
the split-off point or processed further and then sold. The
following results are from a recent period:
Product
Sales Value
at Split-off
Additional
Variable Costs
Sales Value after
Further Processing
Green lumber
$159600
$24000
$178000
Rough lumber
114000
26100
159600
Sawdust
94000
17900
120000
What is the increase in profit if the appropriate products are
processed further?
$27600
$90000
$235600
$22000
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Multiple Choice Question 127
Sheridan Company produces several products that can be sold at
the split-off point or processed further and then sold. The
following results are from a recent period:
Product
Sales Value
at Split-off
Additional
Variable Costs
Sales Value after
Further Processing
Green lumber
$159600
$24000
$178000
Rough lumber
114000
26100
159600
Sawdust
94000
17900
120000
What is the increase in profit if the appropriate products are
processed further?
$27600
$90000
$235600
$22000
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