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Alborosie
3 years ago
10

Primrose Yard receives 15,000 large trees each year that they process into 15,000 rough logs. Currently, Primrose sells the roug

h logs for $50 each. Primrose is considering processing the logs further into refined lumber.
Each log can be processed into 350 feet of refined lumber at an additional cost of $0.20 per foot. The refined lumber can be sold for $0.80 per foot.

Assume that the cost of getting the 15,000 large trees falls by half.

Should Primrose sell the rough logs at split-off or process it further?

a. It should sell at split-off because the decrease in cost price will increase the selling price of the logs.

b. It should sell at split-off because the reduction in the cost of the trees is irrelevant.

c. It should process further because the reduction in the cost of the trees is irrelevant.

d. It should process further because the reduction in the cost of trees makes that option more profitable than it was before.

e. It should process further because the cost reduction will decrease the processing cost.
Business
1 answer:
Kazeer [188]3 years ago
7 0

Answer:

c. It should process further because the reduction in the cost of the trees is irrelevant.

Explanation:

For the purpose of this Decision,

Benefit of processing further = Sales Value after processing – Sale Value before processing – Further Processing costs

Cost of acquiring trees is a sunk cost already incurred and hence is not relevant

Hence, benefit of processing = (0.80-0.20)*350 – 50

= $160

Hence, the answer is

c. It should process further because the reduction in the cost of the trees is irrelevant.

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Explanation:

If an = 3n - 2 , find a2If an = 3n - 2 , find a2

3 0
3 years ago
Earned net income of $65,000 after deducting depreciation of $8,000 and all other expenses. Current assets decreased by $7,000​,
Drupady [299]

Answer:

Cash provided by operating activities is 89.000

Explanation:

The indirect method involves the adjustment of net income with changes in balance sheet accounts to arrive at the amount of cash generated by operating activities.

It depends on the account if it is added or subtracted to net income. Below you will find the added account with a plus (+) and the subtracted ones with a minus (-)

Notice the amounts of any decreases are in parentheses.

Net income 65.000

Adjustment to reconcile the net income to cash  

+ Depreciation expense 8.000

+ Current assets decrease 7.000

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Net cash 89.000

7 0
3 years ago
In reviewing the agreement between AdCreate and Anchor Motors, Jacob Stein found that sales ofAnchor rose 2.8% compared to the p
kakasveta [241]

Answer:

AdCreate billed Anchor Motors $529,412 for the third quarter in 2010

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8 0
3 years ago
Shane is the project manager of the organizational development team at Solid Hardwoods. Shane's team has been assigned the task
qaws [65]

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These employees are usually the top managers and executives working in the company and have authority to make decisions that can impact the company as a whole.

Hence from the above we can conclude that the correct option is B.

7 0
3 years ago
A disadvantage of the line structure is that it
Ivahew [28]

Answer:

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These organizations can overburden a keyman or a few key-men to the extent of their breaking point. Also, in the absence of a staff aid, if a strong man seizes the organization, he can run it arbitrarily. Such arbitrary power can lead to a considerable damage to the organization.

Such organizations usually suffer from a lack of expert advice. If the line manager has trouble making a decision, there is no expert staff that he can turn to.

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Such organizations might also encourage nepotism or favoritism based on relationship or friendship.

I hope this is helpful information.

8 0
2 years ago
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