Paul 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 Additional Sales Value after
at Split-Off Variable Costs Further Processing
Green lumber $159,600 $24,000 $178,000
Rough lumber 124,000 28,200 173,600
Sawdust 102,000 19,600 130,000
Which products should be processed further?
a) All three products
b) Green lumber and sawdust
c) Rough lumber and sawdust
d) Green lumber and rough lumber
c) Rough lumber and sawdust
Business
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