Concord Corporation 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 at Split-off Additional Variable Costs Sales Value after Further Processing Green lumber $159600 $24000 $178000 Rough lumber 126000 28500 176400 Sawdust 106000 20300 134400 What is the increase in profit if the appropriate products are processed further?

only two products should be processed further because they will generate additional profit:

Explanation:

Product              Sales value        Additional var.       Sales value after

                          at split-off          costs                       further processing

Green lumber    $159,600          $24,000                 $178,000

Rough lumber    $126,000          $28,500                $176,400

Sawdust             $106,000          $20,300                 $134,400

the additional profits generated by further processing are:

green lumber = ($178,000 - $159,600) - $24,000 = -$5,600

rough lumber = ($176,400 - $126,000) - $28,500 = $21,900

sawdust = ($134,400 - $106,000) - $20,300 = $8,100

answer; a large down payment,a longer term loan, would result in a lower monthly payment;

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