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Wood Inc. manufactures wood poles. Wood has two responsibility centres, harvesting and sawing, which are both evaluated as profit centres.
Wood Inc. manufactures wood poles. Wood has two responsibility centres, harvesting and sawing, which are both evaluated as profit centres. The harvesting division does all the harvesting operations and transfers logs to the sawing division, which converts the wood into poles for external clients. When operating at full capacity, the sawing division can convert 11,800 poles. Management is considering replacing this type of wood pole with another type of wood pole that can be sold at a lower price and could allow the firm to operate at full capacity all the time.
