Accounting
27th Edition
ISBN: 9781337272094
Author: WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher: Cengage Learning,
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Question
Chapter 25, Problem 25.5APE
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 to decide whether to sell Product K or process it further to Product L.
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Process or Sell
Product J19 is produced for $3.36 per gallon. Product J19 can be sold without additional processing for $4.12 per gallon, or processed further into Product R33 at an
additional cost of $0.37 per gallon. Product R33 can be sold for $4.44 per gallon.
a. Prepare a differential analysis dated April 30 on whether to sell Product J19 (Alternative 1) or process further into Product R33 (Alternative 2). Round your answers
to the nearest cent. If required, use a minus sign to indicate
loss.
Differential Analysis
Sell Product J19 (Alt. 1) or Process Further into Product R33 (Alt. 2)
April 30
Process
Sell
Differential
Further into
Product J19
Effects
Product R33
(Alternative 1)
(Alternative 2)
(Alternative 2)
Revenues, per unit
$
Costs, per unit
Profit (loss), per unit $
$
b. Should Product J19 be sold (Alternative 1) or processed further into Product R33 (Alternative 2)?
Process or Sell
Product J19 is produced for $3.34 per gallon. Product 119 can be sold without additional processing for $4.21 per gallon, or processed further Into Product R33 at an
additional cost of $0.37 per gallon. Product R33 can be sold for $4.32 per gallon.
a. Prepare a differential analysis dated April 30 on whether to sell Product J19 (Alternative 1) or process further into Product R33 (Alternative 2). Round your answers
to the nearest cent. If required, use a minus sign to indicate a loss.
Differential Analysis
Sell Product J19 (Alt. 1) or Process Further into Product R33 (Alt. 2)
April 30
Process
Sel
Differential
Further into
Product R33
(Alternative 2)
Product J19
Effects
(Alternative 1)
(Alternative 2)
Revenues, per unit
Costs, per unit
Profit (loss), per unit
b. Should Product J19 be sold (Alternative 1) or processed further into Product R33 (Alternative 2)?
Process or Sell
Product J19 is produced for $3.36 per gallon. Product J19 can be sold without additional processing for $4.16 per gallon, or processed further into Product R33 at an additional cost of $0.41 per gallon. Product R33 can be sold for $4.52 per gallon.
a. Prepare a differential analysis dated April 30 on whether to sell Product J19 (Alternative 1) or process further into Product R33 (Alternative 2). Round your answers to the nearest cent. If required, use a minus sign to indicate a loss.
Differential Analysis
Sell Product J19 (Alt. 1) or Process Further into Product R33 (Alt. 2)
April 30
SellProduct J19(Alternative 1)
ProcessFurther intoProduct R33(Alternative 2)
DifferentialEffects(Alternative 2)
Revenues, per unit
Costs, per unit
Profit (loss), per unit
Chapter 25 Solutions
Accounting
Ch. 25 - Explain the meaning of (a) differential revenue,...Ch. 25 - A company could sell a building for 250,000 or...Ch. 25 - A chemical company has commodity-grade and...Ch. 25 - A company accepts incremental business at a...Ch. 25 - A company fabricates a component at a cost of...Ch. 25 - Prob. 6DQCh. 25 - In the long run, the normal selling price must be...Ch. 25 - Although the cost-plus approach to product pricing...Ch. 25 - How does the target cost concept differ from...Ch. 25 - Prob. 10DQ
Ch. 25 - Under what conditions might a company use...Ch. 25 - Lease or sell Duncan Company owns a machine with a...Ch. 25 - Lease or sell Timberlake Company owns equipment...Ch. 25 - Prob. 25.2APECh. 25 - Discontinue a segment Product B has revenue of...Ch. 25 - Make or buy A restaurant bakes its own bread for a...Ch. 25 - Make or buy A company manufactures various sized...Ch. 25 - Replace equipment A machine with a book value of...Ch. 25 - Replace equipment A machine with a book value of...Ch. 25 - Prob. 25.5APECh. 25 - Process or sell Product D is produced for 24 per...Ch. 25 - Accept business at special price Product AA is...Ch. 25 - Prob. 25.6BPECh. 25 - Product cost markup percentage Light force Inc....Ch. 25 - Product cost markup percentage Green Thumb Garden...Ch. 25 - Bottleneck profit Product A has a unit...Ch. 25 - Prob. 25.8BPECh. 25 - Activity-based costing Mainline Marine Company has...Ch. 25 - Activity-based costing Casual Cuts Inc. has total...Ch. 25 - Differential analysis for a lease-or-sell decision...Ch. 25 - Prob. 25.2EXCh. 25 - Prob. 25.3EXCh. 25 - Differential analysis for a discontinued product...Ch. 25 - Segment analysis for a service company Charles...Ch. 25 - Decision to discontinue a product On the basis of...Ch. 25 - Make or buy decision Diamond Computer Company has...Ch. 25 - Make-or-buy decision for a service company The...Ch. 25 - Machine replacement decision A company is...Ch. 25 - Differential analysis for machine replacement Kim...Ch. 25 - Sell or process further Big Fork Lumber Company...Ch. 25 - Prob. 25.12EXCh. 25 - Decision on accepting additional business...Ch. 25 - Accepting business at a special price Portable...Ch. 25 - Prob. 25.15EXCh. 25 - Accepting business at a special price for a...Ch. 25 - Product cost concept of product pricing La Femme...Ch. 25 - Product cost concept of product costing Smart...Ch. 25 - Target costing Toyota Motor Corporation uses...Ch. 25 - Target costing Instant Image Inc. manufactures...Ch. 25 - Product decisions under bottlenecked operations...Ch. 25 - Product decisions under bottlenecked operations...Ch. 25 - Activity-based costing CardioTrainer Equipment...Ch. 25 - Activity-based costing Zeus Industries...Ch. 25 - Activity rates and product costs using...Ch. 25 - Total cost concept of product pricing Based on the...Ch. 25 - Variable cost concept of product pricing Based on...Ch. 25 - Differential analysis involving opportunity costs...Ch. 25 - Differential analysis for machine replacement...Ch. 25 - Differential analysis for sales promotion proposal...Ch. 25 - Prob. 25.4APRCh. 25 - Prob. 25.5APRCh. 25 - Prob. 25.6APRCh. 25 - Activity-based costing Pure Cane Sugar Company...Ch. 25 - Prob. 25.1BPRCh. 25 - Differential analysis for machine replacement...Ch. 25 - Differential analysis for sales promotion proposal...Ch. 25 - Differential analysis for further processing The...Ch. 25 - Prob. 25.5BPRCh. 25 - Product pricing and profit analysis with...Ch. 25 - Activity-based costing Southeastern Paper Company...Ch. 25 - Ethics in Action Aaron McKinney is a cost...Ch. 25 - Communication The following conversation took...Ch. 25 - Decision on accepting additional business A...Ch. 25 - Accept business at a special price for a service...Ch. 25 - Identifying product cost distortion Peachtree...
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