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 Sell Regular Columbian (Alternative 1) Process Further into Decaf Columbian (Alternative 2) Differential Effect on Income (Alternative 2) Revenues $fill in the blank b8b72103f03805f_1 $fill in the blank b8b72103f03805f_2 $fill in the blank b8b72103f03805f_3 Costs fill in the blank b8b72103f03805f_4 fill in the blank b8b72103f03805f_5 fill in the blank b8b72103f03805f_6 Income (Loss) $fill in the blank b8b72103f03805f_7 $fill in the blank b8b72103f03805f_8 $fill in the blank b8b72103f03805f_9 b. Should Rise N' Shine sell Columbian coffee or process further and sell Decaf Columbian? c. 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. $fill in the blank 2c49baf8507102c_2 per pound

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 12E: Sell or process further Dakota Coffee Company produces Columbian coffee in batches of 7,500 pounds....

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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
	Sell Regular Columbian (Alternative 1)	Process Further into Decaf Columbian (Alternative 2)	Differential Effect on Income (Alternative 2)
Revenues	$fill in the blank b8b72103f03805f_1	$fill in the blank b8b72103f03805f_2	$fill in the blank b8b72103f03805f_3
Costs	fill in the blank b8b72103f03805f_4	fill in the blank b8b72103f03805f_5	fill in the blank b8b72103f03805f_6
Income (Loss)	$fill in the blank b8b72103f03805f_7	$fill in the blank b8b72103f03805f_8	$fill in the blank b8b72103f03805f_9

b. Should Rise N' Shine sell Columbian coffee or process further and sell Decaf Columbian?

c. 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.
$fill in the blank 2c49baf8507102c_2 per pound

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