Chapter 7, Problem 7.3AP

(1)

To determine

To Calculate: The Company’s total weekly gross profit assuming the table cleaner is not processed further.

(2)

To determine

Gross Profit: Gross Profit is the difference between the net sales, and the cost of goods sold. Gross profit usually appears on the income statement of the company.

To Calculate: The Company’s total weekly gross profit assuming the table cleaner is processed further.

(3)

To determine

Decision-making process:

Decision making can be defined as the process of making choices through the identification of a decision, collecting information, and assessing alternative resolutions. The implementation of a step-by-step process of decision making helps in making deliberate and effective decisions through proper organization of relevant information and defining alternatives.

To compare: The resulting net incomes and comment on the management’s decisions.

(b)

To determine

Incremental analysis:

Incremental analysis involves the accumulation of information that pertains to a single course of action or product line. Incremental analysis identifies the possible effects that can occur due to the decisions taken on the future earnings.

If the table cleaner should be processed further or not using the incremental analysis.