Calgary Lumber has a raw lumber division and a finished lumber division. The variable costs are as follows: Raw lumber division: $ 125 per 100 board-feet of raw lumber
Finished lumber division: $ 145 per 100 board-feet of finished lumber
Required:
Assume that there is no board-feet loss in processing raw lumber into finished lumber. Raw lumber can be sold at $ 175 per 100 board-feet. Finished lumber can be sold at $ 345 per 100 board-feet.
1. Should Calgary Lumber process raw lumber into its finished form? Show your calculations.
2. Assume that internal transfers are made at 130% of variable cost. Will each division maximize its division operating-income contribution by adopting the action that is in the best interest of Calgary Lumber as a whole? Explain.
3. Assume that internal transfers are made at market prices. Will each division maximize its division operating-income contribution by adopting the action that is in the best interest of Calgary Lumber as a whole?

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Shelby company produces three products: product x, product y, and product z. data concerning the three products follow (per unit): product x product y product z selling price $ 85 $ 65 $ 75 variable expenses: direct materials 25.50 19.50 5.25 labor and overhead 25.50 29.25 47.25 total variable expenses 51.00 48.75 52.50 contribution margin $ 34.00 $ 16.25 $ 22.50 contribution margin ratio 40 % 25 % 30 % demand for the company’s products is very strong, with far more orders each month than the company can produce with the available raw materials. the same material is used in each product. the material costs $8 per pound, with a maximum of 4,400 pounds available each month. required: a. compute contribution margin per pound of materials used. (round your intermediate calculations and final answers to 2 decimal places.) contribution margin per pound product x $ product y $ product z $ b. which orders would you advise the company to accept first, those for product x, for product y, or for product z? which orders second? third? product x product y product z