Question: chunderbuggle ltd is a lumber company daytoday operations consist of...
Chunderbuggle Ltd is a lumber company. Day-to-day operations consist of cutting down trees and processing logs into slabs of timber.
During this process, sawdust is produced in large quantities. The company can sell sawdust for $20 per tonne.
The company has the option of pressing this sawdust into cardboard by using a special machine. It can then sell cardboard for $60 per tonne.
In deciding whether to produce cardboard, managers must consider: