British Columbia Lumber has a Raw Lumber Division, Cost Accounting

British Columbia Lumber has a Raw Lumber Division and a Finished Lumber Division. The  variable costs are:

1.Raw Lumber Division: Rs. 100 per 100 board-feet of raw lumber

2.Finished Lumber Division: Rs. 125 per 100 board-feet of finished lumber. 
Suppose  that there is no board-feet loss in processing raw lumber  into finished lumber. Raw  Lumber can be at Rs. 200 per 100 board-feet. Finished lumber can be sold at Rs.275 per 100 board-feet.

Required:
1.  Should British Columbia Lumber process raw lumber into its finished form? Show your computations.

2.  Suppose   that  internal  transfers  are  made  at  110%  of  variable  costs. Will  every division  maximize  its  division  operating  income  contribution  by  adopting  the action that is in the best interest of British Columbia Lumber? Explain.

3.  Suppose  that  internal  transfers  are  made  at  market  prices.  Will  every  division maximize its division operating income contribution by adopting the action that is in the best interest of British Columbia Lumber? Describe.  

Posted Date: 3/18/2013 7:00:00 AM | Location : United States







Related Discussions:- British Columbia Lumber has a Raw Lumber Division, Assignment Help, Ask Question on British Columbia Lumber has a Raw Lumber Division, Get Answer, Expert's Help, British Columbia Lumber has a Raw Lumber Division Discussions

Write discussion on British Columbia Lumber has a Raw Lumber Division
Your posts are moderated
Related Questions
Question P A RT A Borrico ltd manufacture a single product and they had currently introduced a system of budgeting and variance analysis. The subsequent information i

Integrated Ledger System An integrated account ledger system, which has a number of features that may be viewed as preferable to the interlocking ledger system. In present dec

1. The table below gives data for Southland where there are three consumption goods: bananas, coconuts and grapes. Goods Quantity in base period basket

AOL is considering two proposals to overhaul its network infrastructure. They have received two bids. The first bid, from Huawei, will require a $20 million upfront investment and

EFFECTIVENESS AUDITING is one type of internal audit. Describe and evaluate this type of internal audit. What types of organisation would it be most useful for? Required: 1)

Explain and illustrate with your own example the operating cycle of a merchandiser.   Explain and  illustrate the differences between a multiple-step income statement and a single

mojor elements of cost sheet

The Butchering Department of the Santa Fe Meat Packing Corporation (a process costing corporation, FIFO costing) had 1,500 units, 1/3 completed at the beginning of the period and 1

what are importance of cost classification

Eckels Wares is a division of a major corporation. The following data are for the latest year of operations: Sales