Paul Bunyon Lumber Co - the Additional Profit That Would Result from Processing Rough

question 110

Multiple Choice

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: $\begin{array}{lrrr}& \text { Sales Value } & \text { Additional } & \text { Sales Value after } \\\text { Product } & \text { at Split-off } & \text { Variable Costs } & \text { Further Processing } \\\hline\text { Green lumber } & \$ 159,600 & \$ 24,000 & \$ 178,000 \\\text { Rough lumber } & 124,000 & 28,200 & 173,600 \\\text { Sawdust } & 102,000 & 19,600 & 130,000\end{array}$
- The additional profit that would result from processing rough lumber further is

• A)$21,400.
• B)$49,600.
• C)$145,400.
• D)$95,800.

---

Definitions:

Obligor

A person or entity legally bound to provide a payment, service, or other benefit to another (the obligee) under the terms of a contract or legal agreement.

Negotiable Instrument

A formal written notice ensuring a particular sum of money will be paid, either immediately when asked or at a certain date, with the document specifying who is to pay.

Promissory Note

A written, legally binding document in which one party promises to pay another a specific sum of money, either on demand or at a defined future date.

Maker

The individual or entity that creates or signs a promissory note, thereby agreeing to pay the note's value at maturity.