Homework Help is Here – Start Your Trial Now!
Business
Accounting
Rise N' Shine Coffee Company produces Columbian coffee in batches of 6,000 pounds. The standard quantity of materials required in the process is 6,000 pounds, which cost $5.50 per pound. Columbian coffee can be sold without further processing for $9.22 per pound. Columbian coffee can also be processed further to yield Decaf Columbian, which can be sold for $11.88 per pound. The processing into Decaf Columbian requires additional processing costs of $10,230 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 Process Sell Differential Further into Regular Effect Decaf Columbian on Income Columbian (Alternative 1) (Alternative 2) (Alternative 2) Revenues $ 55,320 V $ 67,716 $ 12,396 Costs 10,230 10,230 X Income (Loss) 22,320 $ 24,486 $ 2,166

Rise N' Shine Coffee Company produces Columbian coffee in batches of 6,000 pounds. The standard quantity of materials required in the process is 6,000 pounds, which cost $5.50 per pound. Columbian coffee can be sold without further processing for $9.22 per pound. Columbian coffee can also be processed further to yield Decaf Columbian, which can be sold for $11.88 per pound. The processing into Decaf Columbian requires additional processing costs of $10,230 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 Process Sell Differential Further into Regular Effect Decaf Columbian on Income Columbian (Alternative 1) (Alternative 2) (Alternative 2) Revenues $ 55,320 V $ 67,716 $ 12,396 Costs 10,230 10,230 X Income (Loss) 22,320 $ 24,486 $ 2,166

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

need help on this one thanks

**Sell or Process Further** Rise N' Shine Coffee Company produces Columbian coffee in batches of 6,000 pounds. The standard quantity of materials required in the process is 6,000 pounds, which costs $5.50 per pound. Columbian coffee can be sold without further processing for $9.22 per pound. Columbian coffee can also be processed further to yield Decaf Columbian, which can be sold for $11.88 per pound. The processing into Decaf Columbian requires additional processing costs of $10,230 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** | $55,320 | $67,716 | $12,396 | | **Costs** | 0 | 10,230 | -10,230 | | **Income (Loss)** | $22,320 | $24,486 | $2,166 | - **Revenues:** The revenue from selling regular Columbian coffee is $55,320. If processed further, the revenue becomes $67,716, resulting in a differential effect of $12,396. - **Costs:** There are no additional costs for selling regular Columbian, but processing into Decaf incurs a cost of $10,230. This results in a negative differential effect of -$10,230. - **Income (Loss):** Selling regular results in an income of $22,320, while processing into Decaf results in $24,486, with a differential income of $2,166 favoring further processing.
Transcribed Image Text:**Sell or Process Further** Rise N' Shine Coffee Company produces Columbian coffee in batches of 6,000 pounds. The standard quantity of materials required in the process is 6,000 pounds, which costs $5.50 per pound. Columbian coffee can be sold without further processing for $9.22 per pound. Columbian coffee can also be processed further to yield Decaf Columbian, which can be sold for $11.88 per pound. The processing into Decaf Columbian requires additional processing costs of $10,230 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** | $55,320 | $67,716 | $12,396 | | **Costs** | 0 | 10,230 | -10,230 | | **Income (Loss)** | $22,320 | $24,486 | $2,166 | - **Revenues:** The revenue from selling regular Columbian coffee is $55,320. If processed further, the revenue becomes $67,716, resulting in a differential effect of $12,396. - **Costs:** There are no additional costs for selling regular Columbian, but processing into Decaf incurs a cost of $10,230. This results in a negative differential effect of -$10,230. - **Income (Loss):** Selling regular results in an income of $22,320, while processing into Decaf results in $24,486, with a differential income of $2,166 favoring further processing.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Financial Planning
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.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS