OBJ. 1 PR 25-4A Differential analysis for further processing The management of Dominican Sugar Company is considering whether to process further raw sugar into refined sugar. Refined sugar can be sold for $2.20 per pound, and raw sugar can be sold without further processing for $1.40 per pound. Raw sugar is produced in batches of 42,000 pounds by processing 100,000 pounds of sugar cane, which costs $0.35 per pound of cane. Refined sugar will require additional processing costs of $0.50 per pound of raw sugar, and 1.25 pounds of raw sugar will produce 1 pound of refined
OBJ. 1 PR 25-4A Differential analysis for further processing The management of Dominican Sugar Company is considering whether to process further raw sugar into refined sugar. Refined sugar can be sold for $2.20 per pound, and raw sugar can be sold without further processing for $1.40 per pound. Raw sugar is produced in batches of 42,000 pounds by processing 100,000 pounds of sugar cane, which costs $0.35 per pound of cane. Refined sugar will require additional processing costs of $0.50 per pound of raw sugar, and 1.25 pounds of raw sugar will produce 1 pound of refined
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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please read the intructions on the first picture and answer the empty boxes on Problem 25-4A. thanks for your help!
![PR 25-4A Differential analysis for further processing
OBJ. 1
The management of Dominican Sugar Company is considering whether to process further
raw sugar into refined sugar. Refined sugar can be sold for $2.20 per pound, and raw
sugar can be sold without further processing for $1.40 per pound. Raw sugar is produced
in batches of 42,000 pounds by processing 100,000 pounds of sugar cane, which costs
$0.35 per pound of cane. Refined sugar will require additional processing costs of $0.50
per pound of raw sugar, and 1.25 pounds of raw sugar will produce 1 pound of refined
sugar.
Instructions
1. Prepare a differential analysis as of March 24 to determine whether to sell raw sugar
(Alternative 1) or process further into refined sugar (Alternative 2).
Briefly report your recommendations.
2.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5f4393cb-18d1-4725-b612-a05ed7381007%2Fdec96a13-13e7-4716-bdd7-06e6c4615bd8%2F7b674qc_processed.png&w=3840&q=75)
Transcribed Image Text:PR 25-4A Differential analysis for further processing
OBJ. 1
The management of Dominican Sugar Company is considering whether to process further
raw sugar into refined sugar. Refined sugar can be sold for $2.20 per pound, and raw
sugar can be sold without further processing for $1.40 per pound. Raw sugar is produced
in batches of 42,000 pounds by processing 100,000 pounds of sugar cane, which costs
$0.35 per pound of cane. Refined sugar will require additional processing costs of $0.50
per pound of raw sugar, and 1.25 pounds of raw sugar will produce 1 pound of refined
sugar.
Instructions
1. Prepare a differential analysis as of March 24 to determine whether to sell raw sugar
(Alternative 1) or process further into refined sugar (Alternative 2).
Briefly report your recommendations.
2.
![Problem 25-4A
Question 1
Differential Analysis
Sell Raw Sugar (Alt. 1) or Process Further into Refined Sugar (Alt. 2) March 24
Revenues, per batch
Costs, per batch
Income (Loss), per batch
Question 2
We should
Sell Raw
Sugar (Alternative 1)
Wrong
Process Further into Refined Sugar
(Alternative 2)
because profits would be reduced by
Differential Effect on Income
(Alternative 2)
per batch](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5f4393cb-18d1-4725-b612-a05ed7381007%2Fdec96a13-13e7-4716-bdd7-06e6c4615bd8%2F0ka19bc_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 25-4A
Question 1
Differential Analysis
Sell Raw Sugar (Alt. 1) or Process Further into Refined Sugar (Alt. 2) March 24
Revenues, per batch
Costs, per batch
Income (Loss), per batch
Question 2
We should
Sell Raw
Sugar (Alternative 1)
Wrong
Process Further into Refined Sugar
(Alternative 2)
because profits would be reduced by
Differential Effect on Income
(Alternative 2)
per batch
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