Zing Coffee Company produces Columbian coffee in batches of 6,500 pounds. The standard quantity of materials required in the process is 6,500 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 be sold for $12 per pound. The processing into Decaf Columbian requires additional processing costs of $12,883 per batch. The additional processing also causes a 5% oss 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 thos 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 Revenues Costs Sell Regular Columbian (Alternative 1) 58,500✔ 39,000 X 10 500 Process Further into Decaf Columbian (Alternative 2) 74,100 ✔ 51,883 X 22 217 Differential Effect on Income (Alternative 2) ✓ $ 15,600 ✓ 12,883 X 2.717 ✓

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....
icon
Related questions
icon
Concept explainers
Topic Video
Question
7.2) The ones with red x on it
Sell or Process Further
Zing Coffee Company produces Columbian coffee in batches of 6,500 pounds. The standard quantity of materials required in the process is 6,500 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 $12,883 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
Revenues
Costs
Income (Loss)
Sell
Regular
Columbian
(Alternative 1)
58,500 ✔
39,000 X
19,500
Process
Further into
Decaf
Columbian
(Alternative 2)
74,100 ✔
51,883 X
22,217
✓
Differential
Effect
on Income
(Alternative 2)
$
✓
15,600
12,883 X
2,717 ✓
Transcribed Image Text:Sell or Process Further Zing Coffee Company produces Columbian coffee in batches of 6,500 pounds. The standard quantity of materials required in the process is 6,500 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 $12,883 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 Revenues Costs Income (Loss) Sell Regular Columbian (Alternative 1) 58,500 ✔ 39,000 X 19,500 Process Further into Decaf Columbian (Alternative 2) 74,100 ✔ 51,883 X 22,217 ✓ Differential Effect on Income (Alternative 2) $ ✓ 15,600 12,883 X 2,717 ✓
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Costing Systems
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.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Essentials of Business Analytics (MindTap Course …
Essentials of Business Analytics (MindTap Course …
Statistics
ISBN:
9781305627734
Author:
Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:
Cengage Learning
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Excel Applications for Accounting Principles
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning