Abica Coffee Company produces Columbian coffee in batches of 6,500 pounds. The standard quantity of materials required in the process is 6,500 pounds, which cost $6 per pound. Columbian coffee can be sold without further processing for $9 per pound. Columbian coffee can also be processed further to yield Decaf Columbian, which can be sold for $12 per pound. The processing into Decaf Columbian requires additional processing costs of $13,068 per batch. The additional processing also causes a 5% loss of product due to evaporation. a. Prepare a differential analysis dated October 6 on whether to sell regular Columbian (Alternative 1) or process further into Decaf Columbian (Alternative 2). For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Sell Regular Columbian (Alt. 1) or Process Further into Decaf Columbian (Alt. 2) October 6 Sell Regular Columbian (Alternative 1) Process Further into Decaf Columbian (Alternative 2) Differential Effect on Income (Alternative 2) Revenues $fill in the blank 97ce1f063fdffa0_1 $fill in the blank 97ce1f063fdffa0_2 $fill in the blank 97ce1f063fdffa0_3 Costs fill in the blank 97ce1f063fdffa0_4 fill in the blank 97ce1f063fdffa0_5 fill in the blank 97ce1f063fdffa0_6 Income (Loss) $fill in the blank 97ce1f063fdffa0_7 $fill in the blank 97ce1f063fdffa0_8 $fill in the blank 97ce1f063fdffa0_9 Feedback b. Should Abica sell Columbian coffee or process further and sell Decaf Columbian? _ c. Determine the price of Decaf Columbian that would cause neither an advantage nor a disadvantage for processing further and selling Decaf Columbian. Round your answer to two decimal places. $_ per pound

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Sell or Process Further

Abica Coffee Company produces Columbian coffee in batches of 6,500 pounds. The standard quantity of materials required in the process is 6,500 pounds, which cost $6 per pound. Columbian coffee can be sold without further processing for $9 per pound. Columbian coffee can also be processed further to yield Decaf Columbian, which can be sold for $12 per pound. The processing into Decaf Columbian requires additional processing costs of $13,068 per batch. The additional processing also causes a 5% loss of product due to evaporation.

a. Prepare a differential analysis dated October 6 on whether to sell regular Columbian (Alternative 1) or process further into Decaf Columbian (Alternative 2). For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Differential Analysis
Sell Regular Columbian (Alt. 1) or Process Further into Decaf Columbian (Alt. 2)
October 6
	Sell Regular Columbian (Alternative 1)	Process Further into Decaf Columbian (Alternative 2)	Differential Effect on Income (Alternative 2)
Revenues	$fill in the blank 97ce1f063fdffa0_1	$fill in the blank 97ce1f063fdffa0_2	$fill in the blank 97ce1f063fdffa0_3
Costs	fill in the blank 97ce1f063fdffa0_4	fill in the blank 97ce1f063fdffa0_5	fill in the blank 97ce1f063fdffa0_6
Income (Loss)	$fill in the blank 97ce1f063fdffa0_7	$fill in the blank 97ce1f063fdffa0_8	$fill in the blank 97ce1f063fdffa0_9

Feedback

b. Should Abica sell Columbian coffee or process further and sell Decaf Columbian?
_________

c. Determine the price of Decaf Columbian that would cause neither an advantage nor a disadvantage for processing further and selling Decaf Columbian. Round your answer to two decimal places.

$_________ per pound

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Decision to Sell before or after additional processing

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions