Working Papers, Chapters 1-17 for Warren/Reeve/Duchac’s Accounting, 27th and Financial Accounting, 15th
27th Edition
ISBN: 9781337272155
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 25, Problem 25.12EX
a)
To determine
Differential Analysis: Differential analysis refers to the analysis of differential revenue that could be gained or differential cost that could be incurred from the available alternative options of business.
To Prepare: The differential analysis of Company RNSC on October 6, to decide whether to sell Regular Columbian or process it further to Decaf Columbian.
b)
To determine
To Explain: On the basis of differential analysis, to decide whether to sell Regular Columbian or process it further to Decaf Columbian.
c)
To determine
The price at which Decaf Columbian would cause neither advantage nor disadvantage for processing it further and selling the Decaf Columbian.
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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
SellRegularColumbian(Alternative 1)…
Sell or Process Further
Rise N’ Shine Coffee Company produces Columbian coffee in batches of 6,800 pounds. The standard quantity of materials required in the process is 6,800 pounds, which cost $4 per pound. Columbian coffee can be sold without further processing for $8.4 per pound. Columbian coffee can also be processed further to yield Decaf Columbian, which can be sold for $10 per pound. The processing into Decaf Columbian requires additional processing costs of $8,450 per batch. The additional processing will also cause a 6% 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).
Differential Analysis
Sell Regular Columbian (Alt. 1) or Process Further into Decaf Columbian (Alt. 2)
October 6
Sell RegularColumbian(Alternative 1)
Process Furtherinto Decaf Columbian(Alternative 2)
DifferentialEffect on Income(Alternative 2)…
Sell or Process Further Rise N' Shine Coffee Company produces Columbian coffee in batches of 4,300 pounds. The
standard quantity of materials required in the process is 4, 300 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 $8,972 per batch. The additional processing also causes a 5% loss of product due to evaporation. Question
Content Area 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 b. 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.
0
Differential Analysis
Sell…
Chapter 25 Solutions
Working Papers, Chapters 1-17 for Warren/Reeve/Duchac’s Accounting, 27th and Financial Accounting, 15th
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