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

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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 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
$ 67,716
12,396
Costs
X
10,230 X
10,230 X
Income (Loss)
22,320
24,486
$ 2,166
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 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 $ 67,716 12,396 Costs X 10,230 X 10,230 X Income (Loss) 22,320 24,486 $ 2,166
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